How many SAFE types are there?

[pavitrabhalla]

No description provided.

[pavitrabhalla]

@dosu can you help with this question?

[dosubot]

There are four types of SAFE documents:

1. Safe: Valuation Cap, no Discount
2. Safe: Discount, no Valuation Cap
3. Safe: MFN, no Valuation Cap, no Discount
4. Safe: Valuation Cap, No Discount (for non-US companies) ^[1].

To continue talking to Dosu, mention @dosu.

[pavitrabhalla]

@dosu Thanks. how is the effective pre money valuation calculated on each SAFE type?

[dosubot]

The effective pre-money valuation for each SAFE type can be calculated as follows:

1. Safe: Valuation Cap, no Discount

   • The pre-money valuation is the valuation cap specified in the SAFE.

2. Safe: Discount, no Valuation Cap

   • The pre-money valuation is calculated by applying the discount to the next equity financing round's valuation. For example, if the discount is 20% and the next round's valuation is $10 million, the effective pre-money valuation would be $8 million.

3. Safe: MFN, no Valuation Cap, no Discount

   • The pre-money valuation is determined by the terms of the next equity financing round, as the MFN (Most Favored Nation) clause allows the SAFE holder to convert at the same terms as the most favorable terms given to other investors.

4. Safe: Valuation Cap, No Discount (for non-US companies)

   • Similar to the first type, the pre-money valuation is the valuation cap specified in the SAFE.

For more detailed information, you can refer to the SAFE documents on Y Combinator's website [[id=1]].

To continue talking to Dosu, mention @dosu.