INV-03 · The dilution surprise

Stack two SAFEs and a priced round on Scenario S. What number will the founders not expect, and which term caused it?

CASE-ACME scenario-s-safes.md (a what-if, not Acme's history). The CapStack SAFE calculator and a spreadsheet. Lab L-03 first.

Entering post-money SAFEs as pre-money, or the reverse. Assuming both SAFEs convert at their caps. Forgetting the pool top-up. Explaining the surprise with a vague "dilution happens."

A before-and-after ownership table; for each SAFE, whether it converted at its cap or discount, with the arithmetic; a sensitivity table showing how the founders' stake moves as the pool target and each cap change; and a one-page founder letter naming the single term that moved their stake most.

CT: tracing a percentage back to the term that caused it. CR: choosing which sensitivities to run. CO: a peer plays the founder and asks "so what should I have negotiated?" — and the student answers without giving legal advice. CM: the founder letter. CZ: founders who sign SAFEs without seeing this table.

A founder or startup lawyer reviews the founder letter. Standing instruction: reject any letter that tells the founder what to sign. School-supervised.

R1: one scenario, one surprise. R2: every share count re-derivable from the calculator. R3: comparator is the founders' own guess, recorded before the calculator run. R4: cap-versus-discount and pool assumptions named. R5: the letter is readable by a first-time founder. R6: refuses to recommend terms.

(a) Both SAFEs converted at their caps, so one share count is wrong. (b) A correct table with no answer to "which term caused it."

Lane A (business, finance, or entrepreneurship capstone). No verified credit claim.