can you make a video about about start up founder (single) equite dilute when raising money in each round with SAFE framework

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Welcome to our guide on startup equity dilution. When a single founder starts a company, they begin with one hundred percent ownership. However, to grow the business and achieve success, they typically need to raise capital from investors. This fundraising process involves giving up portions of ownership, known as equity dilution. Today we'll explore how this works using the SAFE framework, which stands for Simple Agreement for Future Equity. When entrepreneurs start a company, they typically own one hundred percent of the equity. However, as they raise funding through SAFE agreements and traditional equity rounds, their ownership percentage gets diluted. SAFE agreements add complexity because they don't immediately convert to equity but rather convert during future priced rounds. Let's explore how a founder's equity changes through multiple funding rounds using the SAFE framework. A SAFE agreement stands for Simple Agreement for Future Equity. Unlike traditional equity investments, a SAFE does not give investors immediate ownership in the company. Instead, it provides the right to receive equity shares in the future, typically when the company raises a priced funding round. Key terms include the valuation cap, which sets a maximum company valuation for conversion, and the discount rate, which gives SAFE investors a percentage discount on the price paid by new investors. This structure allows founders to raise capital quickly without immediately determining company valuation. In the first funding round, the founder starts with one hundred percent ownership, typically represented by one million shares. When a SAFE investor puts in five hundred thousand dollars with a five million dollar valuation cap and twenty percent discount, something important happens: there is no immediate dilution of the founder's equity. The SAFE holder receives conversion rights that will be exercised later when the company raises a priced equity round. This is a key advantage of SAFE agreements for founders in early stages. When the company raises its Series A round at an eight million dollar pre-money valuation, the SAFE finally converts to equity. Since the Series A valuation exceeds the SAFE's five million dollar cap, the SAFE conversion uses the cap value. The SAFE investor receives ten percent of the company for their five hundred thousand dollar investment. The new Series A investors get eighteen percent for their two million dollars. After this conversion and new investment, the founder's ownership is diluted from one hundred percent to seventy-two percent. To summarize what we've learned about startup equity dilution with SAFE agreements: SAFEs delay dilution until priced funding rounds, giving founders flexibility in early stages. Valuation caps protect early investors when company valuations increase significantly. Multiple SAFE agreements can stack up over time, creating substantial dilution when they all convert. Founders should carefully model different scenarios to understand how their ownership will change through various funding rounds. In the first funding round, the founder starts with one hundred percent ownership, typically represented by one million shares. When a SAFE investor puts in five hundred thousand dollars with a five million dollar valuation cap and twenty percent discount, something important happens: there is no immediate dilution of the founder's equity. The SAFE holder receives conversion rights that will be exercised later when the company raises a priced equity round. This is a key advantage of SAFE agreements for founders in early stages. When the company raises its Series A round at an eight million dollar pre-money valuation, the SAFE finally converts to equity. Since the Series A valuation exceeds the SAFE's five million dollar cap, the SAFE conversion uses the cap value. The SAFE investor receives ten percent of the company for their five hundred thousand dollar investment. The new Series A investors get eighteen percent for their two million dollars. After this conversion and new investment, the founder's ownership is diluted from one hundred percent to seventy-two percent. In the Series B round, the company raises five million dollars at a twenty million dollar pre-money valuation. The new Series B investors receive twenty percent of the company. This dilutes all existing shareholders proportionally. The founder's ownership drops from seventy-two percent to fifty-seven point six percent. The SAFE investor goes from ten percent to eight percent, and Series A investors drop from eighteen percent to fourteen point four percent. Each funding round reduces everyone's percentage ownership, even though the absolute value of their holdings may increase due to higher company valuation.