♞ Uncapped SAFEs

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Why Uncapped SAFEs are a red flag for many investors.

Every week, I see founders excitedly announcing their raise on a SAFE with a discount—but no cap. And I have to be honest: this is usually a mistake.

Here’s the problem: an uncapped SAFE can create misalignment between founders and early supporters. Without a cap, early investors have almost no protection, and the signal it sends is that the early stage of your company isn’t being valued. That may make it harder to attract serious, experienced backers later.

From my experience advising startups, the conversations I see around SAFEs often miss a simple truth: fundraising isn’t just about speed—it’s about building relationships. A cap isn’t just a number; it’s a statement that you respect your earliest believers and are committed to fair alignment.

What I tell founders:

• Treat your early supporters well. A fair SAFE with a cap helps signal trust and professionalism.

• Think long-term. Raising on an uncapped SAFE may seem faster, but it can create friction when you go back for the next round.

• Be clear on expectations. Early supporters want to understand their upside and their rights—clarity now prevents misunderstandings later.

Takeaway for founders: Fundraising isn’t just about closing quickly—it’s about building momentum with the right people. Valuation caps aren’t a limitation—they’re a signal that you value your early supporters and are setting the stage for long-term success.

Are you looking to grow your business? Here is how I can help:

📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)

Onwards and Upwards,

Liam Gill