SAFE Note Conversion Calculator
What a SAFE converts into at a priced round, and which of the cap and the discount actually governed. The cap is the term that matters in a good outcome: in a strong round the discount is irrelevant and the cap is doing all the work.
Also called: safe conversion calculator, y combinator safe calculator.
11.11% for 50,00,000 on conversion, at an effective price of ₹4 a share. The cap governed: 4 a share against 6.4 after the discount. The round was priced well above the cap, so the discount never came into it, which is why the cap is the term worth negotiating. This is a post-money SAFE, so the percentage is fixed regardless of what else converts alongside. Dilution from other SAFEs falls on the founders rather than being shared with this investor.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
Cap against discount
| Route | Price a share | Shares | Applies |
|---|---|---|---|
| Round price | ₹8 | 6,25,000 | No, the SAFE converts below it |
| Discount of 20% | ₹6 | 7,81,250 | No, the cap is lower |
| Valuation cap | ₹4 | 12,50,000 | Yes |
How this is calculated
A SAFE is not a loan and carries no interest or maturity. It converts at the lower of two prices: the cap divided by the share count, and the round price less the discount. In a round priced far above the cap the cap price is much lower and governs entirely, which is why a founder should treat the cap as the real term and the discount as a footnote. The post-money variant, standard since 2018, fixes the investor percentage regardless of what other SAFEs convert alongside, so the dilution from stacked SAFEs falls on the founders rather than being shared. That change is worth understanding before signing several.
the investor converts at whichever of the cap price and the discounted round price is lower, which is the entire economics of a SAFE- C
- Valuation cap
- q
- Shares outstanding
- p_r
- Round price
- d
- Discount
Method and limits
What it assumes
- Conversion at a priced round rather than at a sale or a maturity event.
What it deliberately does not model
- Multiple SAFEs interact, and post-money SAFEs stack their dilution entirely onto the founders.
- Pro rata rights, MFN clauses and side letters change the outcome without appearing in this arithmetic.
Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator
Frequently asked questions
- Does the cap or the discount apply?
- Whichever gives the investor the lower price. In a round priced well above the cap that is the cap, and the discount never comes into it.
- What changed with post-money SAFEs?
- The investor percentage became fixed rather than diluted by other SAFEs converting at the same time. It is clearer for the investor, and it moves the dilution from stacked notes onto the founders.