SAFE Calculator

A SAFE (Simple Agreement for Future Equity) lets investors put money in now and receive shares later when the company raises a priced round. Conversion price is usually the better (lower) of: (1) cap price = valuation cap ÷ fully diluted shares, or (2) discounted price = priced round price × (1 − discount ÷ 100). Lower price means more shares for the SAFE holder.

Y Combinator published the standard SAFE templates; terms vary (pro-rata side letters, MFN, post-money vs pre-money SAFEs). This calculator uses a simplified pre-money style model — your legal document controls. SAFE holders dilute founders when they convert; they are not debt and pay no interest.

Example: $250K SAFE at $10M cap with 20% discount. Priced round at $15M pre-money on 10M shares → priced share = $1.50. Cap price = $1.00. Discount price = $1.50 × 0.80 = $1.20. Conversion at $1.00 (cap wins) → 250,000 shares. Ownership ≈ 250K ÷ (10M + 250K) ≈ 2.4%. Real cap tables include pool and other convertibles.

The valuation cap protects early investors when the priced round is higher than the cap. If the company raises at $20M pre-money but the SAFE cap is $10M, the SAFE holder converts as if the company were worth $10M — receiving roughly twice the shares they would at the round price.

The discount rewards early risk when the cap does not bind. If the priced round values the company below the cap, the discount off the round price may produce a lower conversion price instead.

Post-money SAFEs (common since 2018) define investor ownership at signing more clearly than pre-money SAFEs. Stacking multiple SAFEs before a priced round can surprise founders on total dilution — model each SAFE separately.

Worked example when discount wins: $100K SAFE, $15M cap, 15% discount. Priced round at $8M pre on 8M shares → round price $1.00. Cap price = $15M ÷ 8M = $1.875. Discount price = $1 × 0.85 = $0.85. Conversion at $0.85 → ~117,647 shares.

Pro-rata side letters, most-favored-nation clauses, and conversion triggers in your legal docs can change outcomes. This tool assumes standard conversion at the next equity round.

SAFE conversion is not the same as the priced-round dilution calculator — run both to see founder ownership after notes and SAFEs convert alongside new investors.

Most-favored-nation (MFN) SAFEs let an investor adopt better terms if you issue later SAFEs on friendlier terms — stacking SAFEs requires tracking side letters carefully.

Qualified financing thresholds define which priced round triggers conversion. A small bridge priced as equity might not qualify if the SAFE defines a minimum raise size.

Founders sometimes forget outstanding SAFEs when negotiating pre-money valuation — investors often treat SAFE conversion as part of the pre-money negotiation implicitly.

Side letters granting pro-rata rights in the priced round let SAFE holders invest their ownership share — increases check size but does not change conversion price math.

Company repurchase rights on SAFEs at dissolution return investor cash before common distributions — read dissolution clauses in YC templates carefully.

Multiple SAFE rounds at different caps stack conversion complexity — each converts at its own cap or discount relative to the priced round, not at a blended average.

Acquisition can trigger SAFE conversion at prices defined in the SAFE — not always the same as a traditional priced round conversion; read acquisition clauses separately from priced-round clauses.

Uncapped SAFEs convert at the priced-round discount only — no valuation cap ceiling applies, which can produce more investor shares than founders expect in hot rounds.

Interest-free design means SAFE holders wait without coupon payments — compare time value of money against convertible notes if investors offer a choice between instruments.

Legal review of SAFE side letters is essential before stacking multiple early investors — side terms can alter conversion relative to this baseline estimate.