SAFE Note Calculator
What a SAFE converts into when the priced round arrives, and which term does the work.
With both a cap and a discount, the SAFE converts at whichever gives the lower valuation, which is the standard term. Here that is the cap. A cap well below the eventual round is worth far more than the headline discount, and it is the term founders should model before signing rather than after.
A SAFE is money now for equity later. Nothing is priced at the time; instead the investor gets terms that decide how their money converts when a priced round eventually happens. The two terms that matter are the valuation cap and the discount.
Worked example. $500,000 on a $5,000,000 cap with a 20% discount, converting into a round priced at a $20,000,000 pre-money. The discount alone would price at $16,000,000. The cap prices at $5,000,000, which is far lower, so the cap applies and the investor receives 10% of the company. The effective discount is 75%, not 20%.
Frequently asked questions
What is a valuation cap?
The maximum valuation at which the SAFE converts, regardless of what the priced round is valued at. It rewards early risk: if the company is worth far more by the round, the SAFE investor still buys in at the capped price.
Post-money or pre-money SAFE?
The standard Y Combinator SAFE has been post-money since 2018, which fixes the investor's percentage and pushes all subsequent dilution onto founders. Pre-money SAFEs share dilution among earlier holders. The distinction matters a great deal when several SAFEs stack, and this calculator models the simpler single-instrument case.
Can a SAFE convert without a priced round?
Most SAFEs also convert on a change of control or, in some versions, at a maturity date. Absent any of those triggers, a SAFE can sit outstanding indefinitely, which is one reason investors care about the company actually raising a priced round.
Do SAFEs stack?
Yes, and that is where founders get caught out. Several SAFEs at different caps all convert at the same round, and their combined dilution can be far larger than any single instrument suggests. Model the whole stack together before signing another one.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.