Free founder calculator · ₹ or $
SAFE conversion calculator: what a SAFE converts into
A SAFE (simple agreement for future equity) turns into shares at the next priced round. How many depends on the valuation cap and any discount: the investor gets whichever price is better for them. This calculator shows which applies and what everyone owns after the round.
Runs in your browser; nothing you type is saved. Results are estimates, not financial advice.
SAFE conversion calculator: worked example
- wins over the 20% discount
- $5M cap
- SAFE holder after the round
- 8%
- founders and earlier holders
- 72%
- Converts at
- $5M (cap)
- SAFE holder after the round
- 8%
- Everyone else before the round, after
- 72%
- New investors
- 20%
How the conversion works
A post-money SAFE converts at the lower of two valuations: its cap, or the round's pre-money valuation less the discount. With a post-money cap, the SAFE's stake just before the round is roughly the investment divided by that valuation. The new money then dilutes everyone, the SAFE holder included.
Example: a $500K SAFE with a $5M post-money cap and a 20% discount, converting in a Series A at a $20M pre-money valuation that raises $5M. The discount would give a $16M valuation, so the $5M cap is better for the investor and wins: the SAFE holder has 10% before the new money. The round sells 20% of the company ($5M of a $25M post-money), so afterwards the SAFE holder has 8%, the founders and earlier holders 72%, and the new investors 20%.
If the round instead priced the company at $4M pre-money, the discount would bring that to $3.2M, below the cap, so the SAFE would convert at $3.2M and own about 15.6% before the new money.
What the simple model leaves out
Use the result as an estimate. The round's lawyers produce the exact conversion in the closing cap table.
- Several SAFEs at different caps: each converts on its own terms, and together they dilute the founders more.
- Option pool top-ups that the new investors ask for before the round.
- Pro-rata side letters and most-favoured-nation clauses.
- Pre-money SAFEs, which convert differently.
Why the cap matters most
In a strong round, the cap usually decides the conversion, so a low cap gives early investors a large stake. Model a few likely round valuations before agreeing a cap, and keep track of the total raised on SAFEs: each one comes out of the founders' share at conversion.
Questions founders ask
What is a post-money SAFE?
The standard Y Combinator SAFE since 2018. Its cap is a post-money valuation that includes the SAFE money, so the investor's percentage is fixed when it's signed, whatever other SAFEs are raised later.
Does a SAFE get both the cap and the discount?
No. It converts at whichever gives the investor the lower price, not both.
Can Indian startups use SAFEs?
Indian companies usually raise through compulsorily convertible instruments instead, such as CCPS, or convertible notes for eligible startups, because of company law and foreign-investment rules. See our explainer on SAFEs and convertible notes.
The weekly brief
More on SAFE conversion, once a week
Who raised, who launched and the founder terms worth knowing, in one short email a week.
The StartupReader app
Startup news in 60-second swipes
Funding, launches and founder programs, each on one card with the key numbers. Free, with read-aloud and auto-scroll.
Coming soonBuilding something? List your startup free.
Keep exploring
- ExplainerSAFE vs convertible note: how they work and which to use →SAFEs and convertible notes both turn into equity later. Valuation caps, discounts, interest and maturity compared, with how early rounds are structured in India.
- ExplainerPre-money vs post-money valuation, with examples →Pre-money is what a startup is worth before new investment; post-money adds the new money. How to calculate both, investors' ownership and the option pool effect.
- ExplainerLiquidation preference explained, with worked examples →A liquidation preference decides who gets paid first when a startup is sold. 1x non-participating vs participating, worked through at two exit prices.
- ExplainerTerm sheet explained: the key terms and what is binding →A term sheet sets out the main terms of a startup investment before the legal documents. Valuation, option pool, preferences, control rights and what binds.
- CalculatorStartup dilution calculator →How much founders own after each round, including option pool top-ups.
- Guide hubStartup funding and equity, explained →Plain-English explainers with worked examples and the Indian context.
Results are estimates for planning and learning, based only on the numbers you enter. They are not financial, tax or investment advice. All founder calculators.