Free SAFE Conversion Calculator
Calculate how SAFEs convert to equity at your priced round. Model valuation caps, discounts, and see the resulting ownership percentages.
About SAFEs
A SAFE (Simple Agreement for Future Equity) converts to equity at a future priced round. The conversion price is the lower of: (1) the valuation cap price, or (2) the discount applied to the priced round price.
Priced Round Details
SAFEs Outstanding$500,000 total
Enter SAFE details and priced round info to calculate conversion
How to Use the SAFE Conversion Calculator
Enter SAFE Investment Details
Input the SAFE investment amount and select the type (post-money or pre-money). Specify whether the SAFE has a valuation cap, discount, or both.
Set Cap and Discount Terms
Enter the valuation cap (if applicable) and discount percentage (typically 15-25%). For post-money SAFEs, the cap is the post-money ownership cap.
Input Priced Round Details
Enter the priced round pre-money valuation and investment amount. Add the number of shares outstanding to calculate price per share.
Review Conversion Results
See which conversion method (cap or discount) produces more shares. View the SAFE holder ownership percentage, shares received, and effective conversion price.
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Understanding SAFE Conversions
SAFEs (Simple Agreements for Future Equity) have become the standard instrument for early-stage fundraising. Created by Y Combinator in 2013, they provide a simpler alternative to convertible notes without interest or maturity dates.
Key SAFE Terms
- Valuation Cap: Maximum valuation for conversion, protecting early investors from excessive dilution
- Discount: Percentage discount to the priced round price (typically 15-25%)
- Pro-Rata Rights: Right to invest in future rounds to maintain ownership percentage
- MFN Clause: Most Favored Nation allows conversion to better terms if offered later
Frequently Asked Questions
What is a SAFE and how does it convert to equity?
A SAFE (Simple Agreement for Future Equity) is an investment instrument created by Y Combinator. It converts to equity at a future priced round at the lower of: (1) a valuation cap price, or (2) a discount to the round price, whichever gives the investor more shares.
What is a valuation cap in a SAFE?
A valuation cap sets the maximum valuation at which the SAFE converts to equity. If the company raises at a $20M valuation but the cap is $10M, the SAFE investor gets shares as if the valuation was $10M, effectively getting more shares.
How does the discount work in a SAFE?
The discount (typically 15-25%) is applied to the price per share in the priced round. If new investors pay $1/share with a 20% discount, SAFE holders pay $0.80/share. The SAFE converts at whichever method (cap or discount) gives more shares.
What is the difference between pre-money and post-money SAFEs?
In pre-money SAFEs (older style), the cap is the pre-money valuation before SAFEs convert. In post-money SAFEs (YC standard since 2018), the cap already includes the SAFE investment, giving founders clearer ownership expectations.
When do SAFEs typically convert?
SAFEs convert at "triggering events" - usually a priced equity round (Series Seed or A), an acquisition, or an IPO. Until then, SAFE holders do not have equity, voting rights, or guaranteed returns.
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