Raise Millions by Hustle Fund VC Page 25 We know a founder who raised a bunch of money via pre-money SAFEs. He didn’t realize his equity had been diluted so much until he tried to raise his equity round. This founder discovered he only owned 35% of the company at the seed stage, which is no bueno. We'll share exactly how all of this works with some easy numbers later in this chapter. But for now, Eric offers this warning, “It is really easy to mess up these calculations when you have so many different kinds of pre-money valuations stacking on top of each other with capital that you raised before your Series A, or whenever your post-money raise takes place.” Why founders are using post-money SAFEs instead To rectify the unintended consequences, YC later introduced post- money SAFEs. They wanted founders to have clarity on how much of the company they’re selling. Here’s the magic equation: (investment) / (post-money valuation) ● Example #1: The founder raises $500k on a $5M post-money valuation. $500k / $5M = 10%. This founder has sold 10% of the company. hustlefund.vc / @hustlefundvc