A SAFE (Simple Agreement for Future Equity) is a short contract that says: someone gives the company cash today, and in exchange gets shares later, when the company raises a real priced round. It is not a loan. There is no interest, no maturity date, no repayment schedule. If the priced round never happens, the SAFE never converts.
Two numbers do most of the work. The valuation cap is a ceiling on the price at which the SAFE turns into shares — it protects the SAFE holder from getting priced out by a great round. The discount gives the SAFE holder a break on the round’s price if the cap doesn’t bind. The SAFE converts at whichever mechanism gives the holder the larger stake.
The studio does not take a fee. Instead it signs a post-money SAFE at Day 0 with a principal equal to the studio’s cash cost of the 90-day build — roughly $150,000 for a standard cohort company, covering the operator time, the sales team, the build stack, and the infrastructure the studio pays for out of pocket.
The terms are the same for every cohort company: $8M post-money cap, 20% discount, MFN. It converts only if the company closes a priced seed round. If Day 90 lands on GROW, PARK, or KILL and no priced round follows, the SAFE dissolves and the studio walks away with only its Day-0 common. The studio is paid when the founder is paid.
Every example below starts from the same Day-0 cap table: studio 15% common (Adopt-door floor), founder(s) 85% common, one Build-value SAFE at $8M cap / 20% discount / $150k principal. The only variable is the priced seed round.
Assemble-door companies start with studio common between 20–25% instead of 15%, because the studio contributed the market thesis and the founding pairing on top of the build. Every other number on this page — SAFE cap, discount, MFN, principal, conversion trigger — is identical. Substitute your Day-0 stake for “15%” in the tables below and the rest of the math holds.
Round priced below the $8M cap, so the 20% discount is what binds. SAFE converts at 80% of the round price.
Round priced above the $8M cap. SAFE converts at the cap. This is the shape most GO cohorts land in.
Cap does its job. The SAFE holder captures the same 1.875% pre-round they would have at a $10M round. That is what a cap is for.
No priced round means no conversion. The Build-value SAFE dissolves. The studio keeps its Day-0 common (15% Adopt, higher for Assemble) with no repayment, no interest, and no lingering claim on the balance sheet. If the company later becomes cash-generative, the studio takes a capped revenue share instead of a raise-driven SAFE payoff. If the company shuts down, the studio absorbs the build cost.
Post-money SAFEs are the modern standard because the ownership math is legible before the round: SAFE % = principal ÷ cap. For the Cupel SAFE that is $150k ÷ $8M = 1.875%. That is the stake the SAFE holder is targeting before the new-money shares are minted at the priced round.
When the round prices above the cap — a $12M or $20M pre-money — the cap binds and the SAFE holder gets the full 1.875% pre-new-money. When the round prices below the cap (a $6M pre-money) the 20% discount takes over and gives the SAFE holder slightly more than 1.875% (the exact number depends on the round’s post). Either way, both the SAFE stake and the studio’s common are then diluted by the new money in the round, in the same proportion as every other existing shareholder.
It is not debt. It cannot be called. There is no interest and no maturity date. It cannot force a sale of the company. It has no board seat, no protective provisions, no veto rights, and no information rights beyond what every seed investor gets. The only lever the studio has after Day 90 is the same lever every other minority shareholder has: showing up to the annual meeting.
- 01 · Studio holds Day-0 common between 15% (Adopt) and 25% (Assemble), set at intake. That does not change after Day 0.
- 02 · Studio also holds one post-money SAFE. $8M cap, 20% discount, MFN, ~$150k principal.
- 03 · SAFE converts only at a priced seed. Never at bridge, note, or later SAFE.
- 04 · At the cap, the SAFE is 1.875% pre-new-money. Discount can raise that in a lower-priced round.
- 05 · No priced round, no conversion. The SAFE dissolves and the studio absorbs the build cost.