Angel Investing Math: SAFEs, Dilution & Power-Law Portfolios

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Turn a seed term sheet into the post-money valuation, the price per share and your ownership, then back out the pre-money from an offer quoted as "USD 750k for 15 %".
• Convert three SAFEs with different caps and discounts into Series A shares, see which term wins for each, and read a post-money SAFE's ownership directly.
• Accrue interest on a convertible note by the day, convert principal plus interest at the lower of the cap price and the discounted price, and see what the note is worth on paper at the Series A.
• Size a Series A where the new option pool is carved out of the pre-money, find the real price per share, and follow your seed stake through Series A and Series B.
• Compare skipping the next rounds with exercising your pro-rata right, and measure how much follow-on cash keeping your 1 % really needs.
• Split four exit values between a senior Series A, the seed preferred you hold a piece of, and common, then stack the result in a chart.
• Calculate how the chance of holding at least one 30x outcome grows with the number of deals, find the smallest portfolio for a 50 % chance, and chart the curve.
• Measure a ten-year angel portfolio by its cash multiple and its XIRR, see how much one exit carries, and compare XIRR with a naive annualised multiple.