Nathoo: Lawyers frequently make errors on SAFE conversion cap tables
Kirsty Nathoo · Carolynn Levy and Kirsty Nathoo - Startup Investor School Day 1 · Y Combinator · Mar 6, 2018 · at 32:21
Kirsty Nathoo, CFO at Y Combinator, advises angel investors to independently review pro forma cap tables when SAFEs convert during priced equity rounds.
0:00 / 0:09exact quote · 9.7s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“The cap tables that we see, and we've now seen thousands of cap tables, it's surprising how many times the lawyers actually get the conversions wrong.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Kirsty Nathoo
Nathu: Startup co-founders should generally split equity more or less equally
“We generally say that equity should be split more or less equally between co-founders. That doesn't necessarily mean exactly equally, But we generally find that where there is an equity split that's very mismatched, you know, one founder has 90% and the other …”
Nathoo: Series A leads push pre-money SAFE conversion targeting 20% ownership
“Series A lead investors are getting more clever about this and realizing that if the safes convert in the pre-money, then the, Lead investors getting less dilution. And really all that's happening is if the safes do convert in the round, they'll just massage t…”
Nathu: YC accepts proportionally fewer solo founder applicants
“We don't accept that many proportionally to the numbers that apply because there's so much to do in a startup.”
Nathoo: A SAFE Valuation Cap Is Not the Startup's Current Valuation
“They think it's a current valuation of the company. That's really not what it is. All it is, is a way for you to be rewarded for coming in at the earlier stage, ah, when in theory you're investing at a riskier stage.”