SAFE Conversion Calculator
Model how your SAFE notes convert at your next priced round - cap, discount, or whichever produces the most shares.
The SAFE
How much the SAFE investor put in.
The cap is the implied post-money valuation at conversion.
Discount the SAFE holder gets vs. the new round's price-per-share. Leave 0 if cap-only.
The priced round
The negotiated pre-money valuation of the new priced round.
New capital being raised in this round.
Which path wins?
The SAFE converts at whichever path produces more shares. The winning path is highlighted.
Post-round ownership
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How SAFEs actually convert
A SAFE (Simple Agreement for Future Equity) doesn't become real equity until your next priced round. At that moment, it converts into preferred stock at one of two prices - whichever produces more shares for the investor.
The two conversion paths
Most SAFEs have both a valuation cap AND a discount. At conversion, only one of them applies - never both:
- Cap path: the SAFE converts as if your company was worth exactly the cap. If the cap is $10M post-money and the SAFE invested $500K, the investor gets 5%.
- Discount path:the SAFE converts at the new round's price-per-share, with a discount applied. A 20% discount means the SAFE holder pays 80¢ per share where the new investor pays $1.
The SAFE holder gets the better of the two. If the cap-derived price gives them more shares than the discount-derived price, the cap wins. And vice versa.
Post-money vs. pre-money SAFEs - why it matters
YC switched from pre-money to post-money SAFEs in 2018. The change matters: in a post-money SAFE, the ownership percentage at conversion is fixed - the investor knows exactly what % of the post-money cap they'll own, regardless of other SAFEs raised. In a pre-money SAFE, more SAFEs raised later dilute earlier SAFE holders before the priced round.
Post-money is friendlier to investors and more dilutive to founders. If you signed post-money SAFEs, every SAFE's ownership locks in at signing - they collectively shrink the founder pie before the round closes.
When the cap is dilutive
If your priced round's pre-money valuation is much higher than the SAFE cap, the cap path wins by a wide margin. Example: SAFE at $8M post-money cap, round at $30M pre-money = SAFE converts as if your company was worth $8M, while new investors are pricing it at $30M. The SAFE holder gets ~3.7× the ownership their dollars would otherwise buy.
That's the price of using SAFEs to bridge to a strong round - and a reason to negotiate higher caps even when the SAFE feels cheap.
Frequently asked questions
- How does a SAFE convert at a priced round?
- A SAFE converts into preferred stock at whichever produces the most shares for the investor - the valuation cap or the discount on the round's price-per-share. The cap fixes a maximum effective valuation; the discount gives the SAFE holder a price below the new round's price. They never stack - the SAFE converts on the better of the two, not both.
- What's the difference between a pre-money and post-money SAFE?
- A post-money SAFE (the current YC standard) treats the cap as the post-money valuation, meaning the SAFE holder's ownership percentage is locked in regardless of how much other SAFEs are raised. A pre-money SAFE applies the cap before other conversions, so additional SAFEs dilute earlier SAFE holders. Post-money is friendlier to investors and more common today.
- Does the discount apply even if the cap converts?
- No. The SAFE converts at the LOWER of the cap-derived price or the discounted round price. Whichever gives the investor more shares wins. You don't stack discount on top of cap. This calculator shows which one converts and why.
- How does the SAFE affect founder dilution?
- SAFEs dilute existing shareholders (founders, employees, prior holders) the same way any new equity does. The total dilution from a round = new lead investor's stake + SAFE conversion stake + new option pool. SAFEs taken at a low cap relative to the round's pre-money valuation are particularly dilutive because they convert into a larger ownership stake.
- What's an MFN provision and should I care?
- Most-Favored-Nation (MFN) lets earlier SAFE holders 'upgrade' their terms if later SAFEs are issued with better terms (lower cap, higher discount). If you raise multiple SAFE rounds, every later round can implicitly improve earlier investors' terms. Be careful about issuing SAFEs at progressively lower caps without understanding the MFN cascade.
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