Valuation
Post-money valuation is a company's value immediately after new investment closes, equal to the pre-money valuation plus the amount raised, and it is the denominator for every ownership calculation in the round.
An investor's stake is the amount they put in divided by the post-money valuation. The money is inside the company once the round closes, so the valuation that reflects the company they now own a share of is the post-money one.
This is why a round described as raising $4m at a $16m post-money means the investors hold 25%, and the pre-money was $12m.
Y Combinator moved its standard SAFE to a post-money cap in 2018. Under a post-money SAFE the investor's percentage is fixed when they sign and does not shrink if the company issues more SAFEs before the priced round.
The consequence is that stacking several post-money SAFEs stacks dilution onto the founders, and each new SAFE dilutes the earlier holders less than founders expect. Anyone raising on multiple SAFEs should model the combined conversion before signing the last one.
Add the amount invested to the pre-money valuation. Alternatively, divide the investment by the ownership percentage it buys.
A post-money SAFE fixes the investor's ownership percentage at signing. A pre-money SAFE lets that percentage shrink as further SAFEs are issued, so dilution is shared rather than falling on founders alone.
It depends on the term sheet. Pools are often created inside the pre-money, which means they dilute existing holders before the investor's percentage is calculated.
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