| Stakeholder | Shares | Ownership % | Value (at round price) |
|---|---|---|---|
| Enter values above to see cap table | |||
How SAFE notes convert to equity
A SAFE (Simple Agreement for Future Equity) converts into shares at the next priced round. Post-money SAFEs, the standard Y Combinator form, fix the investor's ownership up front: investment divided by the post-money valuation cap.
Formula
Ownership (post-money SAFE) = Investment / Post-money valuation cap Conversion price = lower of (Cap price, Round price x (1 - Discount))
Example
$500,000 on a $10M post-money cap = 5% ownership before the priced round. If the round price per share is below the cap price, the investor converts at the round price (or the discounted price, if a discount applies).
Frequently asked questions
What is the difference between pre-money and post-money SAFEs?
In a post-money SAFE the cap includes all SAFE money, so each investor's ownership is fixed and founders absorb dilution from later SAFEs. In older pre-money SAFEs, SAFE holders dilute each other.
How much dilution should founders expect from SAFEs?
Add up investment / post-money cap for every SAFE. Raising $1M in SAFEs at a $10M post-money cap means about 10% dilution before the priced round.
Does a SAFE have a discount?
Some do. Common forms offer a valuation cap, a discount (often 10-25%), both, or neither (MFN only). The investor gets whichever gives the lower conversion price.