How to Track SAFE Notes After You Wire (Caps, Conversion, Ownership)

SAFE note tracking starts the day the wire clears, not the day you debate the cap. A Y Combinator SAFE (Simple Agreement for Future Equity) is a short contract for the right to stock later — it is not shares yet. After you fund, keep three linked records: the cash, the ownership claim, and the documents. That book is what you use when the SAFE converts, is bought out, or is wound down. The term-sheet math lives in Raziel’s earlier post on SAFE valuation caps and discounts. This is the ledger after close.

What to log the day you wire

Y Combinator’s current US library (as of August 21, 2026) ships three post-money forms — valuation cap and no discount; discount and no cap; and uncapped most-favored-nation (MFN) — plus an optional pro rata side letter. Log the form you signed.

On the cash record: purchase amount, currency, wire date, and the bank receipt. YC’s User Guide treats the purchase amount as the number that later becomes a 1x liquidation preference if the cap applies. If the wired dollars and the face amount differ, keep both figures and the signed SAFE.

On the ownership record, while it is still a SAFE: company legal name, pre-money or post-money form, valuation cap, discount rate if any, MFN yes or no, and whether a pro rata side letter sits next to the SAFE. YC removed default pro rata from the 2018 post-money SAFE; the side letter, when used, applies to the equity financing in which the SAFE converts, not the round after.

On the document record: the signed SAFE, the side letter, the wire confirmation, and later the conversion notice and updated cap table. The parent guide to tracking alternative investments is the same rule — cash dates and documents on one record, not a folder of unlabeled PDFs.

Ownership before a share certificate exists

YC introduced the original SAFE in late 2013 and the post-money SAFE in 2018 so both sides could calculate ownership sold with simple division: purchase amount divided by the post-money valuation cap. YC’s teaching example is a founder targeting a $1 million raise and 15 percent sold, which implies a post-money cap of about $6.7 million. Raise $500,000 on that cap and the sold slice is about 7.5 percent; $800,000 is about 12 percent.

That percentage is post-SAFE and pre-priced-round. YC is explicit that outstanding post-money SAFEs do not dilute one another, and that they are diluted by the new money in the Equity Financing and by the option-pool increase adopted as part of that financing. Cake Equity notes that every new post-money SAFE changes the fully diluted picture at issuance, not only at conversion. Later SAFEs should not move your locked percentage — but you still need the stack. At conversion, YC’s “Company Capitalization” includes other converting securities. If you never logged the other paper, you cannot check the share count.

Do not treat that implied percentage as post-round ownership. The caps-and-discounts post is the place for which-price-wins math. Store the inputs so you can rerun that math when the notice arrives.

Conversion events the SAFE actually names

YC’s User Guide names three endings. None of them is “the SAFE expires.” A SAFE has no maturity date. It terminates when the holder has received stock, cash, or other proceeds — whichever comes first.

Equity Financing. When the company sells preferred stock in a priced round, outstanding SAFEs convert automatically and terminate. The holder has no election, and the post-money form has no minimum raise. If the cap produces the better price, YC says the holder receives Safe Preferred Stock — a shadow series (for example Series A-1) with the same rights as the new-money stock except that liquidation preference, conversion price, and dividend rate are set off the Safe Price, and the preference equals the purchase amount. If the new-money price produces more shares, the holder receives Standard Preferred Stock at that price instead. Log the event date, the price used, the series name, the share count, and the cap table you were sent. An MFN SAFE typically allows one amendment to match a later SAFE in full — not a term-by-term cherry-pick. Record whether you elected.

Liquidity Event. A change of control or an IPO. The holder is entitled to the greater of a return of the purchase amount or the as-converted proceeds as if the purchase amount had become common stock at the post-money cap. The SAFE is junior to creditors and outstanding indebtedness, including convertible notes, on par with standard non-participating preferred, and senior to common.

Dissolution Event. If the company shuts down, the holder is entitled to the purchase amount back, with the same priority. “Entitled to” is not “received.” Post the cash only if money actually returned.

YC’s Standard Deal page states the usual priced-round order: convert SAFEs and other convertibles, create or increase the option pool, then take in the new money. Ownership after close is the converted shares after those last two steps, not the napkin percentage from the cap.

Close the SAFE; do not overwrite it

A conversion is not a second investment. If you overwrite the SAFE row, you lose the instrument you signed. If you add a new preferred line with a fresh cost basis, the book double-counts the wire and every IRR and MOIC that uses that cash is wrong.

Close the SAFE ownership record. Open a preferred-stock record with the series, share count, and conversion date. Link both to the same cash history, and attach the notice and cap table to the document record. A workbook is enough if the links hold. Raziel’s startup investment tracker is built to keep those instruments in one book next to IRR and unrealized gains. The cash line does not move. The security does.