Last updated: 2025-10-08
Simple Agreement for Future Equity. A way for investors to invest now and convert to equity later, without debt or interest.
Why it matters: Most common at pre-seed and seed. Simpler than convertible notes.
Full glossary definition →Debt that converts to equity later. Unlike SAFEs, these have interest rates and maturity dates.
Why it matters: Less common than SAFEs now, but still used at seed stage. Adds administrative complexity.
Full glossary definition →Pre-money is your company's value before the investment. Post-money is value after (pre-money + investment amount).
Example: Raise €1M at €4M pre-money = €5M post-money. Investor owns 20%.
Why it matters: Determines how much equity investors get. Pre-money caps are more founder-friendly in SAFEs.
Your ownership percentage decreases when new shares are issued to investors or employees.
Example: You own 100% initially. After raising 20% to investors, you own 80%. That's dilution.
Why it matters: Dilution is normal and expected, but understanding it helps you negotiate better terms.
Full glossary definition →The right to invest more money in future rounds to maintain your ownership percentage.
Example: An investor owns 10% after seed. In Series A, they can invest more to keep their 10% (instead of being diluted down).
Why it matters: Common investor ask at seed+. Helps them maintain ownership as you grow.
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