SAFE conversion calculator
A SAFE note's cap and discount don't add together, the investor gets whichever produces more shares. This shows exactly which term triggers, the resulting conversion price, and how much of the company it costs.
SAFE ownership
7.69%
Shares issued
833,333
Conversion price
$0.300
The valuation cap sets the price here — it's lower than the discounted round price. At a pre-money valuation of $3,750,000, the cap and discount would produce the same price.
The SAFE conversion formula
The investor takes whichever price is lower, since a lower price per share buys more shares for the same investment. The two mechanisms are not cumulative, a SAFE never gets the cap price further discounted, or the discount applied on top of the cap.
Worked example: the cap triggers
A $250,000 SAFE with a $3,000,000 cap and a 20% discount, converting at a Series A priced at a $20,000,000 pre-money valuation, against 10,000,000 pre-money shares outstanding.
Round price: $20,000,000 ÷ 10,000,000 = $2.00/share. Cap price: $3,000,000 ÷ 10,000,000 = $0.30/share. Discount price: $2.00 × 0.80 = $1.60/share. The cap price is lower, so it triggers: the SAFE converts at $0.30/share, receiving $250,000 ÷ $0.30 = 833,333 shares. 7.69% of the company post-conversion.
Worked example: the discount triggers
A $200,000 SAFE with an $8,000,000 cap and a 20% discount, converting against a $6,000,000 pre-money Series A and 5,000,000 pre-money shares outstanding: a lower valuation than the cap-triggers example above.
Round price: $6,000,000 ÷ 5,000,000 = $1.20/share. Cap price: $8,000,000 ÷ 5,000,000 = $1.60/share. Discount price: $1.20 × 0.80 = $0.96/share. This time the discount price is lower, so it triggers instead: the SAFE converts at $0.96/share, receiving 208,333 shares, 4.0% of the company. Same mechanics, opposite term triggering, purely because the round priced lower relative to the cap this time.
Whether the cap or the discount triggers isn't fixed by the SAFE's terms alone, it depends on where the next round actually prices.
The crossover valuation
Below this valuation, the discount produces the lower (more investor-favorable) price; above it, the cap does. For the $3,000,000 cap and 20% discount in the first example: $3,000,000 ÷ 0.80 = $3,750,000. Any round pricing below $3.75M pre-money would have the discount trigger instead of the cap, a useful number to know before a round is priced, since it shows exactly where the mechanic switches without needing to re-run the full calculation at every possible valuation.
Pre-money vs. post-money SAFEs
Y Combinator switched its standard template to post-money SAFEs in 2018 specifically to fix the unpredictability problem, with a post-money SAFE, a $1,000,000 investment on a $5,000,000 cap is simply 20% ownership, full stop, regardless of how many other SAFEs are also outstanding. The calculator above models the pre-money mechanic (price-per-share based on a stated share count), which is still the right approach for older agreements or when the specific SAFE explicitly uses pre-money terms. Check which type is actually in hand before relying on either method.
This should be the fully diluted share count. Founder shares, any issued preferred stock, and the entire available option pool, whether or not those options have actually been granted yet. Leaving out the unallocated option pool is one of the most common ways this calculation gets understated, since an unallocated pool still counts as outstanding shares for conversion-price purposes even though no specific person holds those shares yet.
The option pool shuffle
A related, easy-to-miss dynamic: investors in a new priced round often require the option pool to be "topped up" to a target size, say, back to 10% of the post-round cap table, before the round closes. Since that top-up dilutes existing shareholders (founders and SAFE holders alike) but happens as part of setting the pre-money valuation, it's sometimes called the "option pool shuffle", the effective pre-money valuation founders experience can be lower than the headline number the round is announced at, once the pool refresh is accounted for. Worth asking directly whether a quoted pre-money valuation already includes an option pool top-up before running it through this calculator, since the number that actually applies to existing shareholders can differ from the one in the term sheet's headline.
Multiple SAFEs, and why the stack gets complicated
Real seed rounds are rarely a single SAFE. They're often a stack of several, raised over time, each with its own cap and discount reflecting the terms available at that point. Every SAFE in the stack typically converts at the same priced round, against the same underlying share count, which means the shares issued to one SAFE change the total share count the next SAFE's ownership percentage gets calculated against.
A founder with three SAFEs at different caps can't simply run each through this calculator independently and add the ownership percentages, the correct approach converts them in sequence (or simultaneously, solving for a consistent total share count across all three), which is exactly the kind of calculation a dedicated cap table tool is built for. This calculator is the right tool for understanding the mechanics on a single instrument or sanity-checking one SAFE's terms, a full stack belongs in cap table software once there's more than one or two instruments involved.
SAFE vs. convertible note
A convertible note is debt, it carries an interest rate (commonly 2-8%) that accrues and adds to the principal converting into equity, and a maturity date, after which the note can technically come due for repayment if no priced round has happened. A SAFE has neither: no interest accrues, and there's no maturity date forcing a resolution. This is why SAFEs became the more common instrument for early-stage rounds. Simpler paperwork, no debt sitting on the balance sheet, and no looming maturity date creating pressure to raise a priced round on a specific timeline.
Typical SAFE terms
General patterns. Actual terms are negotiated and vary by market conditions, investor, and company traction.
A 20% discount is the most common single figure, following Y Combinator's original standard template, with 15-25% as a normal range. Valuation caps vary far more. There's no typical number, since a cap is meant to reflect the company's specific stage and traction at the time of the raise, not a market-wide convention the way the discount rate has become. Some SAFEs carry a discount with no cap at all, or a cap with no discount, the calculator above handles either combination, using whichever terms are actually present.
SAFEs and your runway
SAFE proceeds extend runway the moment the cash lands, well before any conversion happens, the dilution math on this page is a future event, while the cash is immediately real. Worth keeping the two separate in planning: a $250,000 SAFE adds $250,000 of runway today, and separately costs some percentage of the company at the next priced round, whenever that turns out to be. Raising SAFEs specifically to extend runway ahead of hitting a milestone is common and reasonable, the dilution cost is simply the price of that extra time, worth weighing against the alternative of running leaner or cutting burn instead.
Pro-rata rights: the term this calculator can't model
Many SAFEs include a pro-rata right, the ability for the investor to put in additional money at the next round specifically to maintain their percentage ownership, rather than being diluted by the new round like everyone else. This doesn't change the SAFE's own conversion math (still cap vs. discount, whichever is lower), but it does mean the ownership percentage this calculator produces can understate an investor's effective long-term stake, since they may top up at the new round to hold their position rather than letting it shrink. Worth checking whether a specific SAFE includes pro-rata rights before assuming its calculated ownership percentage is the investor's final word on the matter.
MFN (most favored nation) clauses
A second term this calculator can't model directly: an MFN clause gives an earlier SAFE investor the right to swap into the more favorable terms of any later SAFE issued before the priced round. Some SAFEs are issued with no cap and no discount at all, relying entirely on MFN protection, a structurally different instrument from the cap/discount SAFEs this calculator models directly, worth checking for explicitly before running one through the tool above.
The real risk for a founder is subtler than it first sounds. Normally, SAFEs raised later get progressively worse terms for the investor (a higher cap) as the company de-risks and looks more attractive, an expected, healthy progression. An MFN clause disrupts that: if any later SAFE ends up with more favorable terms for any reason, a strategic investor negotiating hard, a bridge raised under time pressure. Every earlier MFN holder can retroactively claim those same terms. Multiple SAFEs that were meant to reflect different points in the company's risk profile can end up converging to the same, most-favorable economics, constraining how much flexibility remains in future fundraising in a way that's easy to underestimate when first agreeing to the clause.
SAFE dilution vs. priced-round dilution
A priced equity round sets a clear, negotiated valuation at the moment money changes hands. Dilution is known immediately, calculated directly from the pre-money valuation and the amount raised. A SAFE defers that question: dilution isn't determined until conversion, which could be months or years after the cash was received, and depends on where the eventual priced round lands relative to the cap and discount.
This deferral is exactly why founders sometimes underestimate SAFE dilution, the cash arrives without an immediate, visible ownership cost attached, and it's easy to lose track of how much of the company several SAFEs collectively represent until the priced round forces the full reckoning. Running the numbers through this calculator periodically, using a realistic estimate of where the next round might price, keeps that deferred cost visible rather than a surprise at conversion.
A SAFE health check
Run through these before trusting a conversion or dilution figure.
The two use different formulas entirely. Check which type the actual SAFE document specifies.
An unallocated pool still counts as outstanding shares for conversion-price purposes.
If more than one SAFE is converting at the same round, ownership percentages calculated in isolation won't sum correctly. See the section above.
Confirm the calculation used MIN(cap price, discount price), not both applied together or the wrong one picked by default.
Common SAFE mistakes
A SAFE never gets both benefits at once. Applying the discount to an already-cap-priced conversion overstates the investor's shares and understates founder ownership.
This understates the share count, which overstates the conversion price and understates how many shares the SAFE actually receives. See the pre-money shares section above.
Ownership percentages from separately-run single-SAFE calculations don't sum correctly once more than one SAFE converts against the same share count.
A SAFE isn't debt. There's no interest, no maturity date, and no repayment obligation if a priced round never happens. Modeling it with loan mechanics like interest accrual produces the wrong numbers entirely.
Frequently asked questions
A Simple Agreement for Future Equity, an early-stage funding instrument, created by Y Combinator, that gives an investor the right to convert their investment into equity at a future priced round, rather than receiving equity or debt immediately. It's not a loan: there's no interest rate and no maturity date.
Most favored nation, it gives an earlier SAFE investor the right to swap into the more favorable terms of any later SAFE issued before the priced round. The founder risk: if any later SAFE gets better terms for any reason, every earlier MFN holder can retroactively claim them too, which can collapse a planned progression of increasingly-favorable-to-the-company terms into one uniform, most-favorable-to-investors rate.
Whichever is lower. Lower price means more shares for the same investment, which is more favorable to the investor. The two mechanisms don't stack; a SAFE with 'a $5M cap and a 20% discount' describes one benefit at conversion, whichever turns out to be better for the investor at the time.
In a post-money SAFE (the standard since 2018), the cap directly sets the investor's ownership percentage: investment ÷ cap. In a pre-money SAFE, the cap sets a price per share based on pre-money shares outstanding, and actual ownership depends on how many other SAFEs and options are also converting. Post-money SAFEs are simpler and more common now, but pre-money SAFEs are still found in older agreements.
Each SAFE can have a different cap and discount, and they typically all convert at the same priced round using the same share count. Meaning the shares issued to one SAFE affect the total share count the next SAFE's ownership percentage is calculated against. Modeling more than one or two SAFEs by hand gets error-prone fast; a real cap table tool is worth using once the stack has more than a couple of instruments.
No. A convertible note is debt, it carries an interest rate and a maturity date, and if the company doesn't raise a priced round before maturity, the note can come due for repayment. A SAFE has neither; it simply waits to convert whenever the next qualifying round happens, with no repayment obligation if one never does.
A 20% discount is the most common single figure, following Y Combinator's original standard template, though 15-25% is a normal range. Valuation caps vary enormously by stage and traction. There's no single typical number, which is why the calculator above is more useful than a rule of thumb.
When a new investor requires the option pool to be topped up to a target size before a round closes, that dilution effectively lowers the pre-money valuation existing shareholders experience below the headline number in the term sheet. Worth confirming whether a quoted pre-money valuation already includes this top-up before running the calculation.
Not the conversion formula itself. Cap and discount work the same way regardless. But pro-rata rights let an investor invest additional money at the new round specifically to maintain their percentage, meaning their effective long-term ownership can exceed what the conversion calculation alone shows.
Because the cash arrives immediately but the ownership cost isn't determined until conversion, sometimes years later. Several SAFEs raised over time can collectively represent more dilution than founders track day to day, since none of it becomes visible until a priced round forces the full calculation.
Yes, for the actual legal agreement, this calculator models the standard conversion mechanics to help understand dilution, but SAFEs can include non-standard terms (side letters, MFN clauses, unusual pro-rata provisions) that a calculator can't account for and that meaningfully affect the real outcome.
Model your own SAFE conversion above, free, or see how it connects to your runway.