In a priced round, the SAFE converts into shares based on the pre-money valuation, which includes the increased options pool.

Founders need to be aware that their ownership percentage can decrease significantly due to dilution from SAFEs and new equity rounds, so they should plan accordingly for future fundraising. The percentage of ownership for SAFE investors is based on the valuation cap in the SAFE, and if the priced round valuation is higher than the cap, they convert at the cap, receiving more shares for the same investment than Series A investors.

The SAFE converts into shares when the company completes an equity financing, which can be a priced round or a series round.

Founders should be cautious about how much they raise on SAFEs, as it dilutes their ownership in the company.

The introduction of post-money SAFEs simplifies understanding dilution by clarifying how much of the company founders have sold to investors after all SAFEs have converted.

It's crucial for founders to understand their dilution when raising money through SAFEs or convertible notes, as they may end up owning significantly less of the company than expected after a priced round.

The lead investor in a priced round typically negotiates the creation of an option pool for new employees, which can dilute existing shareholders but not the new money being invested.

Most companies will raise money first on SAFEs or other convertible instruments, which can complicate understanding how much of the company has been sold.

When raising money on SAFEs, the investor's ownership is calculated by dividing their investment amount by the post-money valuation or valuation cap.