Calculate the conversion price and shares a SAFE or convertible note yields.
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.
SAFE/Convertible Note
Conversion price = min(cap ÷ shares, round price × (1 − discount))
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.
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.
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.
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.