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When you raise on SAFEs/Notes -- which have many positives -- assume:
3x, 2x, 1x
3x: You have to raise 3x as much in your "real" equity round as you raise in debt.
So if you raise $3m in SAFEs, you sort of need to do a $10m+ Series A
3x, 2x, 1x
3x: You have to raise 3x as much in your "real" equity round as you raise in debt.
So if you raise $3m in SAFEs, you sort of need to do a $10m+ Series A
2x: The next round also has to be 2x the price of the notes >post-money< to go well. So, figure out the effective post. It may be higher than you think. This can force you into say needing to do a $40m pre Series A without realizing it ... and without having #s to support it
1x: this is how much VCs "reserve" for future checks when invest in SAFEs + debt. versus usually 1.25x-2x when they do equity
if you come up a bit short and need a little more $, assume no one has dog-eared any with SAFEs/Notes
but most folks will save some after equity round
if you come up a bit short and need a little more $, assume no one has dog-eared any with SAFEs/Notes
but most folks will save some after equity round
so, usually the corollary is:
1 round of fairly priced SAFEs/Debt -- Never Fear
2 rounds of fairly priced SAFEs/Debt -- Don't Expect More
3 rounds of fairly priced SAFE/Debts -- Oy Vey.
1 round of fairly priced SAFEs/Debt -- Never Fear
2 rounds of fairly priced SAFEs/Debt -- Don't Expect More
3 rounds of fairly priced SAFE/Debts -- Oy Vey.
