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SAFE Conversion Calculator

See how many shares a SAFE converts into at a priced round, what it ends up owning, and whether the valuation cap or the discount sets the price.

Inputs

Reset

SAFE terms

SAFE type

0 for no cap

0 for no discount

Company before the round

Common, options and unissued pool

Shares, included in the total

Priced round

Unissued pool as a percent of post-money shares. The top-up is added before the round. 0 for none.

Results

SAFE ownership after the round

Valuation cap applies

3.87%

526,316 shares at $0.9500 per share

Conversion price
$0.9500
48.3% below the round price
Round price per share
$1.8370
Discount price $1.4696, cap price $0.9500
SAFE shares
526,316
Ownership before new money
4.83%
5.00% at the cap, before the pool top-up
Value at round price
$966,851
1.93x the $500K invested
Post-money valuation
$25,000,000
Cap table after the round
HolderSharesOwnership
Existing holders9,000,00066.13%
Option pool (unissued)1,360,90210.00%
SAFE holders526,3163.87%
New investors2,721,80520.00%
Total13,609,023100.00%

For education only. Not tax, legal or investment advice.

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The math

How a SAFE converts

A SAFE is a right to future shares. It turns into stock at the next priced round, and the only question is the price per share it converts at.

  1. Price it at the cap. A post-money SAFE buys investment divided by the cap of the company as it stands just before the round, including every SAFE. A pre-money SAFE divides the cap by the company’s shares without the SAFEs, including any option pool increase made for the round.
  2. Price it at the discount. Take the price the new investors pay and knock off the discount.
  3. Use the lower price. The SAFE converts at whichever price gives the holder more shares. With neither a cap nor a discount, it converts at the round price.
  4. Solve the round. The round price is the pre-money valuation divided by the pre-money fully diluted shares, and that count includes the converted SAFE and the pool top-up. Each depends on the other, so the calculator solves them together.
Cap price (post-money SAFE) = cap / (existing shares + SAFE shares)
Cap price (pre-money SAFE)  = cap / (existing shares + pool top-up)
Discount price              = round price x (1 - discount)
Conversion price            = lower of cap price and discount price
SAFE shares                 = investment / conversion price
Round price                 = pre-money / pre-money fully diluted shares

Assumptions and simplifications

  • Models one SAFE. Several SAFEs on identical terms can be entered as their total; SAFEs with different caps, MFN clauses and convertible notes are not modeled.
  • Follows the standard Y Combinator SAFE definitions: a post-money SAFE’s capitalization excludes the pool increase made for the round, a pre-money SAFE’s includes it.
  • The option pool top-up and converting SAFEs sit in the pre-money share count (the common “pool shuffle”), so they dilute existing holders, not the new investors.
  • No rounding of fractional shares, interest, pro rata rights or liquidity events before the round.

Worked example

A $500K post-money SAFE at a $10M cap

Ownership at the cap
$500,000 / $10,000,000 = 5.00%
Company capitalization
10,000,000 / 95% = 10,526,316
Cap price
$10,000,000 / 10,526,316 = $0.9500
Round price
$20,000,000 / 10,887,218 = $1.8370
Discount price
$1.8370 x 80% = $1.4696
Converts at the valuation cap
526,316 shares
Pool top-up before the round
360,902 shares
Ownership after the round3.87%

Further reading

Frequently Asked Questions

Common questions about the SAFE Conversion calculator and the math behind it.

What is the difference between a post-money and a pre-money SAFE?

A post-money SAFE fixes the holder’s ownership before the priced round: investment divided by the post-money cap, measured on a capitalization that includes every converting SAFE. Later SAFEs dilute the founders, not earlier SAFE holders. A pre-money SAFE prices the cap on the company’s shares without the SAFEs, so each additional SAFE dilutes the other SAFE holders too, and the holder’s final percentage is harder to know in advance.

Does the valuation cap or the discount apply?

Whichever gives the SAFE holder the lower price per share, and therefore more shares. The cap price is the cap divided by the company capitalization. The discount price is the priced round’s price times one minus the discount. When the round is priced well above the cap, the cap wins; when the round comes in near or below the cap, the discount usually wins.

Why is my ownership lower than my investment divided by the cap?

For a post-money SAFE, investment divided by the cap is your ownership just before the priced round. The new investors’ shares and any option pool increase made for the round are issued after that point, so they dilute you along with everyone else. The calculator shows both: the cap ownership before the round and the ownership after it.

Do converting SAFEs count in the priced round’s pre-money valuation?

Usually yes. In a typical term sheet the pre-money fully diluted share count includes the shares the SAFEs convert into and the option pool top-up, so the price per share is lower and the dilution from both falls on existing holders rather than the new investors. This calculator follows that convention.

What happens to a SAFE with no cap and no discount?

It converts at the same price the new investors pay, so the holder gets no price advantage. Some uncapped SAFEs include a most favored nation (MFN) clause that lets the holder adopt better terms from later SAFEs. This calculator does not model MFN terms; enter the terms the SAFE ends up with.

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