SAFE Note Conversion Calculator
See how a SAFE converts at the priced round — which of the valuation cap or discount wins, and the ownership the investor earns.
How it works
Discount valuation = pre-money × (1 − discount%) · Effective valuation = min(cap, discount valuation) · Investor % ≈ investment ÷ effective valuation × 100
A SAFE (Simple Agreement for Future Equity) is not priced when signed; it converts into shares at the next priced round. The investor takes whichever term is better for them — the lower valuation cap or the discounted round price — which is why min() of the two applies. Dividing the SAFE amount by that effective valuation approximates the ownership it converts into; the cap rewards the investor for backing the company early when it was worth less.
Worked example
A $100,000 SAFE with a $5,000,000 cap and 20% discount converts at a round with a $10,000,000 pre-money. The discount gives a $8,000,000 valuation; the cap gives $5,000,000. The cap wins, so the SAFE converts near $100,000 ÷ $5,000,000 = 2% — double the 1% it would get at the full $10M.
Frequently asked questions
What is a valuation cap on a SAFE?
The cap is the maximum company valuation at which the SAFE converts, no matter how high the priced round is. It rewards early investors: if the round prices above the cap, they convert at the lower cap price and get more shares per dollar.
Do the cap and discount stack?
On a standard SAFE, no — the investor gets whichever single term produces the better (lower) conversion price, not both combined. This calculator picks the more favorable of the two.
Is this the exact number of shares?
It is a close approximation on a pre-money basis. Exact conversion depends on the round’s fully diluted share count and whether the pool and other SAFEs convert first, which can shift the percentage by a point or two.
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Educational estimate, not financial, tax or investment advice.