SAFE/Convertible Note Calculator
Calculate the conversion price and shares a SAFE or convertible note yields.
About SAFE/Convertible Note Calculator
The investor receives whichever of the cap or the discount produces the lower price per share, so the cap binds when the priced round is high. Both mechanisms exist to reward taking earlier risk. A low cap relative to the eventual round can dilute founders far more than the headline investment amount suggests, which is why the cap is the most negotiated term.
Formula
SAFE/Convertible Note
Conversion price = min(cap ÷ shares, round price × (1 − discount))
- valuation cap
- The maximum valuation at which the investment converts
- discount
- A reduction to the priced round price, applied as an alternative to the cap
Worked example
With the default values below, SAFE/Convertible Note Calculator returns Shares Issued on Conversion of 333,333. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Investment amountminimum 0
- 250,000
- Valuation capminimum 0.01
- 6,000,000
- Discount to the priced roundaccepts 0–50 %
- 20 %
- Priced round pre-money valuationminimum 0.01
- 10,000,000
- Shares outstanding before the roundminimum 1
- 8,000,000
Results
- Shares Issued on Conversion
- 333,333
- Conversion Price per Share
- $0.750000
- Ownership After Conversion
- 4.000%
- Effective Valuation Applied
- $6,000,000.00
- Conversion Basis Used
- Valuation cap, which gives the investor the better price
Step by step
- 1Values used
- 2SAFE/Convertible Note
- 3Shares Issued on Conversion= 333,333
- 4Conversion Price per Share= 0.750000
- 5Ownership After Conversion= 4.000
- 6Effective Valuation Applied= 6,000,000.00
- 7Conversion Basis Used= Valuation cap, which gives the investor the better price
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
- Figures are rounded for display to 6 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is a simplified illustration. Actual conversion depends on the specific instrument's terms including pro-rata rights, most favoured nation clauses and whether the cap is pre or post-money. Obtain legal and financial advice before signing any financing document.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
This is a simplified illustration. Actual conversion depends on the specific instrument's terms including pro-rata rights, most favoured nation clauses and whether the cap is pre or post-money. Obtain legal and financial advice before signing any financing document.
Frequently Asked Questions
How is SAFE/Convertible Note calculated?
Conversion price = min(cap ÷ shares, round price × (1 − discount)) The investor receives whichever of the cap or the discount produces the lower price per share, so the cap binds when the priced round is high. Both mechanisms exist to reward taking earlier risk.
Why does SAFE/Convertible Note matter?
A low cap relative to the eventual round can dilute founders far more than the headline investment amount suggests, which is why the cap is the most negotiated term.
What values do I need to enter?
This calculator takes 5 inputs: Investment amount, Valuation cap, Discount to the priced round, Priced round pre-money valuation, Shares outstanding before the round. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.