Founders Handbook

This skill distills the 1984 Ventures Founders Handbook (https://1984.vc/docs/founders-handbook) and routes each question to the right chapter. It is a derived summary made by GetEdge, not 1984's text and not endorsed by 1984. The handbook's authors are named per chapter below. Credit 1984 Ventures and the author, link the chapter, and do not present the material as original. Every figure in these files comes from the chapter text; do not invent numbers or fill gaps with market averages.

Route the question first

Match the ask to a row, load that reference file, answer from it, and cite the chapter URL. If the ask spans rows, load each file. If it matches none, say the handbook does not cover it instead of stretching it.

For modelling a real cap table, point the founder to 1984's open-source Cap Table Worksheet (https://startup-finance.1984.vc), the handbook's "Tools" section.

The cap table and SAFE math, as a runnable procedure

When the ask is numeric (a raise, a pool, a conversion), compute, do not paraphrase. The handbook's core identities:

• Price Per Share (PPS) = pre-money valuation / pre-money capitalization (shares before the round).
• New investor shares = investment / PPS.
• Dilution = new shares issued / fully diluted shares (FDS) after the round.
• Post-money = pre-money + investment = FDS after the round * PPS.
• The cap table always sums to 100 points. New ownership comes out of existing ownership.
• A post-money SAFE converts at the lower of two PPS values: cap / company capitalization, or round pre-money / company capitalization. Company capitalization includes the SAFE shares themselves, so the calculation is recursive.

Worked procedure, matching the handbook's own example ($2M post-money SAFE at a $10M cap, then an $8M Series A at $32M pre / $40M post, on 2,000,000 founder shares):

def priced_round(pre_money, investment, pre_shares):
    pps = pre_money / pre_shares
    new_shares = investment / pps
    fds = pre_shares + new_shares
    return {"pps": pps, "new_shares": new_shares, "fds": fds,
            "dilution": new_shares / fds, "post_money": fds * pps}

def safe_conversion(safe_amount, safe_cap, round_pre_money, round_investment, base_shares):
    # base_shares = issued stock + unissued options, before any SAFE shares
    # SAFE ownership fraction before the round: f = safe_amount / safe_cap
    f = safe_amount / safe_cap
    # Recursive solve: company_cap = base_shares / (1 - f)
    company_cap = base_shares / (1 - f)
    pps_safe = safe_cap / company_cap
    pps_round = round_pre_money / company_cap
    pps = min(pps_safe, pps_round)          # SAFE converts at the lower PPS
    safe_shares = safe_amount / pps
    round_shares = round_investment / pps_round
    fds = company_cap + round_shares
    return {"company_cap": company_cap, "pps_safe": pps_safe,
            "pps_round": pps_round, "converts_at": "cap" if pps == pps_safe else "round",
            "safe_shares": safe_shares, "round_shares": round_shares, "fds": fds}

# Handbook example: 2,000,000 founder shares, $2M SAFE at $10M cap, then $8M at $32M pre
safe_conversion(2_000_000, 10_000_000, 32_000_000, 8_000_000, 2_000_000)
# {'company_cap': 2500000.0, 'pps_safe': 4.0, 'pps_round': 12.8, 'converts_at': 'cap',
#  'safe_shares': 500000.0, 'round_shares': 625000.0, 'fds': 3125000.0}

Expected handbook output: founders 32% each, SAFE investor 16% (their 20% diluted by the Series A's 20%), Series A investor 20%, FDS 3,125,000. Option pools and pool increases dilute further; the full mechanics and the pool tables are in references/cap-table-and-safes.md.

What to produce per ask

• Always: answer, then end with "Source:" and the chapter link or links you used, naming 1984 Ventures and the author when the table names one.
• Cap table or dilution: compute with the procedure above, show a before and after table (holder, shares, percent), state the dilution in points, and explain that pool grants move shares out of the pool rather than issuing new ones.
• SAFE: state both PPS values and which binds, run the recursive solve, and flag that a pool increase in the priced round adds recursion the snippet does not cover.
• SAFE vs priced, side letters, pre vs post: use the comparison and the terms list in seed-round-terms.md; name terms to avoid explicitly.
• Series A dilution or negotiation: reproduce the three-step Series A table, then pick the relevant levers from the ten in series-a-and-later.md.
• Deck: review against the principles (30-second read, one message per slide in the header, 15 slides, 20 max) and the 16-slide structure, slide by slide, including the growth-forecast and round-size benchmarks.
• Co-founder departure: walk the five steps, model the cap table effect for SAFE vs priced seed, and flag the QSBS redemption trap before recommending a buy-back.
• Selling the company: walk the seven steps in order, then legal prep, structure and terms from m-and-a-legal-and-qsbs.md. Quote the 1 to 2% of market cap rule when sizing what an acquirer can pay.
• Seed engineering or open source: the five practice areas or the 30-day plan; the PostHog content order ("alternatives to X", then "setup for X" under 1,000 words, then honest comparison tables); telemetry as privacy-first, easy opt-out.

Boundaries

• The handbook's disclaimer applies: general education, not legal or tax advice. Say so whenever the answer touches a real transaction, a separation, or taxes, and point to counsel. QSBS figures are the chapter's as of its writing; tell the founder to confirm current law.
• Every number must come from the reference files. If the handbook gives no figure, say so.
• Do not extend the playbooks: no invented slides, M&A steps, clauses or practices. For exact clause language send the founder to the chapter and YC's documents.
• Do not quote long passages. Summarize and link; the chapters are the canonical text.