You’ve might heard it before. The best way to fundraise is from your customers. Revenue.
Another non-dilutive way is to fund your company yourself. Bootstrapping.
However, many of us need outside money to built the product, reach PFM or simply to scale as fast as possible. Before I sell you the SAFE, here are the other most common types of outside money.
and my personal favorite:
Simple Agreement for Future Equity. Created by Carolynn Levy for YC companies YC SAFE versions. Thank you Carolynn!
The SAFE is my personal favorite and should be yours too. It’s like convertible debt, just without the debt part 😎
No runway concerns about repayment cycle and interest payments. No conversion optionality. It converts based on objective trigger points.
Most professional investors accepts the SAFE. You will still find some European angels that don’t like them 🤷
Just like equity fundraising, your valuation can be calculated “pre-money” and “post-money”.
If you raise $1m on pre-money $10m, your company is worth $11m post-money.
If you raise $1m on post-money $10m, your company is worth $9m pre-money.