The DealUpdated 2026-06-27
Pre-Seed SAFE Terms
We are raising $600,000 to reach the first signed contract. The round is structured in two tiers, so that very little of it dilutes the founders now.
- Tier 1 — the anchor ($150,000), as equity on a SAFE (a simple agreement for future equity, which converts at the next priced round) with a bonus conversion cap of $3.5M, against a $4.5M standard cap for everyone else. Equity entry is exclusive to the first investor.
- Tier 2 — a convertible note ($450,000), a loan that converts into shares at the seed round at the round's price less a 20% discount, subject to the round's valuation cap, rather than as equity now.
So only the $150,000 anchor dilutes at the pre-seed, about 4.3%. The $450,000 converts later, at the seed.
Key terms
| Term | Detail |
|---|---|
| Round | Pre-seed · total US$600,000 |
| Tier 1 (anchor) | US$150,000 equity on a SAFE · bonus valuation cap US$3.5M · exclusive to the first investor |
| Tier 2 (note) | US$450,000 convertible note · converts at the next priced (seed) round at 20% discount, subject to the cap |
| Valuation cap | US$4.5M post-money on the note — the most favourable price at which it converts; a ceiling, not a present valuation |
| Note interest | 8% simple per year, accruing until conversion and added to the amount that converts |
| Note maturity | 24 months from issue |
| Conversion trigger | The next qualified financing (the seed). On a sale or change of control before conversion, the note is repaid or converts on agreed terms (set in the definitive documents) |
| Discount vs cap | Converts at the better of the 20% discount to the seed price or the US$4.5M cap, whichever gives the investor more shares |
| Indicative fair value today | ~US$3.5–4M (independent council estimate, SC-008). The cap sits above this on purpose, as a best-case conversion ceiling |
| Use of proceeds | An eight-month sprint to GATE 0, the first signed paying contract. Runway ~8 months; cash near zero by month 8, so the seed must close by then |
| Key milestone | GATE 0 re-rates the company from the US$4.5M cap to a seed at US$15M pre-money (~3.3× step-up) |
| Governing law | Per the definitive transaction documents |
| Confidentiality | Strictly confidential. See the Important Notice |
What the anchor gets
The first cheque carries terms that the rest of the round does not, to reward going first.
- A lower (bonus) conversion cap, $3.5M against the $4.5M standard.
- Equity rather than debt, exclusive to the anchor.
- Pro-rata rights to keep its percentage in future rounds.
- A board-observer seat and full information rights.
- Most-favoured-nation terms (automatic best terms if a later pre-seed investor gets better ones).
- A first look and a right of first refusal on the seed round.
- "Founding Backer" recognition.
The seed is sized at roughly $3M — about what it costs to build the lead product (IS1) to first revenue — and it is priced after GATE 0, when a signed contract has re-rated the company. A Series A is held open as an option, not built into the plan. Final terms, closing conditions and any minimum or maximum on the round will be set in the definitive transaction documents, which supersede this material.