A founder I know closed their fourth pre-seed SAFE last quarter. $1.4 million raised across four instruments, each at a slightly higher cap than the last. When I asked how much of the company they still owned, they said "around 83%." Their math was simple — $1.4M raised divided by their highest cap suggested about 14% given away.
After actually modeling each SAFE separately, the number was 52%. And the Series A lead they were close to signing wanted another 10% set aside for an executive hire.
This is the gap between what founders think they own and what they actually own — and the 2025 pre-seed data tells you exactly why it's so common.
What the report says, and why it matters
Carta's State of Pre-Seed is the most authoritative view of the early-stage funding market because it's built on actual private market transaction data — not survey responses, not extrapolated estimates. Tens of thousands of pre-seed deals flow through Carta every year. The 2025 report tells us what's actually happening right now, not what founders or investors say is happening.
Three findings stand out for anyone raising or about to raise.
1. SAFEs now dominate. Convertible notes are nearly extinct.
93% of pre-priced rounds in 2025 are SAFEs. Convertible notes have collapsed to a sliver of the market. If you're being asked to sign a convertible note in 2025, it's worth asking why — most founders and investors have moved on.
What this means for you: stop spending time researching convertible notes. The market has consolidated around SAFEs and your time is better spent understanding the post-money structure, the difference between cap-only and cap-plus-discount terms, and how multiple SAFEs interact when they all convert.
2. Median valuation caps are rising.
For pre-seed rounds between $500K and $999K, the median valuation cap is now $10 million. A founder agreeing to a $6M cap on a $500K SAFE is accepting terms meaningfully below the median — and giving away significantly more ownership than market.
What this means for you: know the benchmark before you negotiate. If you're raising between $500K-$999K and an investor proposes a $6-7M cap, you have room to push back. Cap data varies by check size, so the right anchor depends on your specific round size — but the median is now public information and yours to use.
The hidden truth: 93% of pre-priced rounds in 2025 are SAFEs. Convertible notes are nearly extinct.
3. Cap-only is now the norm. Cap-plus-discount has collapsed.
67% of SAFEs in 2025 use a valuation cap only — no discount. The classic structure you may have heard of — a cap AND a discount, where whichever produces a lower price applies at conversion — has fallen to just 26% of deals.
What this means for you: if an investor is asking for both a cap and a discount in 2025, they're asking for terms that are now meaningfully out of market. Whichever term produces a lower conversion price will apply anyway, so the discount mostly serves to give the investor downside optionality at your expense. Cap-only is the modern default.
The hidden risk: SAFE stacking
Here's what the report doesn't tell you directly but the data implies: founders who raise multiple pre-seed SAFEs underestimate their cumulative dilution. With post-money SAFEs, each instrument's ownership is calculated independently and they're additive.
The math: a $200K SAFE at a $4M cap gives away 5%. A $300K SAFE at a $6M cap gives away another 5%. A $500K SAFE at an $8M cap gives away 6.25%. A $400K SAFE at a $10M cap gives away 4%. Total: 20.25% before the Series A even starts.
Most founders calculate this the wrong way — they divide total raised by the highest cap. That math gives you 14%. It's not how post-money SAFEs work. And the difference between 14% and 20% becomes the difference between negotiating a Series A from a position of strength and signing terms you'll regret.
What to do about it
Three concrete actions if you're raising on SAFEs in 2025:
Model your cumulative dilution before issuing each new SAFE. Open a spreadsheet. List every SAFE separately. Calculate ownership for each as investment divided by cap. Sum them. That's what you're giving away — not the rough estimate based on total raised.
Negotiate to market, not below. The benchmarks are public. Cap-only is standard. Median caps are rising. If you're being offered terms meaningfully worse than median for your round size, you have leverage you might not be using.
Consider switching to a priced round when total SAFE financing approaches $3-5M. Beyond that threshold, the cap table complexity creates real problems for your Series A. A priced seed round costs more in legal fees up front but eliminates the cumulative dilution math and gives you a clean foundation for the next round.
The takeaway
Pre-seed in 2025 is a more standardized market than it was three years ago. SAFEs dominate. Cap-only is normal. Caps are higher. But the founders who do well are still the ones who know exactly what they're signing — because the data shows that the average founder doesn't.
Want to test your SAFE intuition? Try the SAFEs topic pack on Gargiulo — ten scenarios on post-money mechanics, stacking math, MFN clauses, and when to switch to a priced round. Sterling will be there.
Sources: Carta State of Pre-Seed 2025