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Our first vault was a “pre-money” vault, because at the time of its launch, startups raised small amounts of money before launching a cheap funding round (typically a round of Serie A preferred shares). The safe was an easy and quick way to get the first money in the business, and the concept was that safe owners were just early investors in this future price cycle. But fundraising at the beginning developed in the years following the launch of the original vault, and now startups are raising much larger sums of money than the first round of “Seed” funding. While safes are used for these seed towers, these cycles are really better regarded as totally separate financing rather than “bridges” in subsequent price cycles. The new vault doesn`t change two fundamental features, which we think remain important for startups: Kirsty: Yes. The question is therefore how the ceiling works in relation to the cycles evaluated by prices. Therefore, if the price cycle is above the cap, the SAFE converts to the cap, meaning that SAFE holders will basically receive more shares for the same amount of money as Series A investors. In this situation, you know what percentage you are selling. But in the situation where the cap is higher than the cheap cycle, then you would never be. It wouldn`t be fair for SAFE owners to make a worse deal than Serie A investors because they would have put money into it before. And what happens next is that when you go back to the first section of SAFE, where it says what happens in a discounted stock market situation, the calculation says, “If the cap is higher than the cheap cycle, then they only use the price of the price to calculate their shares.” And because this round price is different, these numbers will go up.
Kirsty: Well, it depends. It depends on the delta. So if it`s just a little bit different, then, yes, maybe instead of 15%, they sold 16%, let`s say. But if the delta is really big, it could go up. But then again, there is something to note, it is unlikely, in the current context, that people will increase at lower prices than their SAFEs simply because investors, if you collect money for SAFEs, will not agree to invest in a ridiculously high quote, because they want to get this bonus from the lower price if their SAF converts. Yes. All right. Let`s go. All right. You have to trust me. The next step of the crossroads is therefore to increase the pool of options.
And it`s actually a pretty complicated calculation. It gets a little circular. And I`m going to share a template with everyone so you can see how it works when you`re interested. But basically, try to reach 10% of post-money stocks in the options pool. And in this example, we`re going to increase our option pool by 1.695 million. .