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SAFE Valuation Calculator

Work out the shares and ownership a SAFE converts into given its cap, discount and the priced round.

About SAFE Valuation Calculator

A SAFE with both a cap and a discount converts on whichever is more favourable to the investor, which is the lower valuation. Ownership is then the investment divided by that conversion valuation. Founders often model SAFEs at the cap and are surprised when a modest round makes the discount bind instead, or when several SAFEs stack into far more dilution than expected.

Formula

SAFE Valuation

Conversion valuation = the lower of the valuation cap and the discounted round price

cap
Maximum valuation at which the SAFE converts
discount
Reduction against the priced round valuation

Worked example

With the default values below, SAFE Valuation Calculator returns Valuation the SAFE Converts At of $8,000,000. Change any input above and every figure here is recalculated in your browser.

Inputs used

SAFE investmentminimum 0
500,000
Valuation capminimum 0.01
8,000,000
Discount to the priced roundaccepts 0–100 %
20 %
Pre-money valuation of the priced roundminimum 0.01
15,000,000

Results

Valuation the SAFE Converts At
$8,000,000
Ownership on Conversion
6.250%
Implied Price Using the Cap
$8,000,000
Implied Price Using the Discount
$12,000,000
Which Term Applies
The valuation cap applies — it is the lower of the two

Step by step

  1. 1Values used
  2. 2SAFE Valuation
  3. 3Valuation the SAFE Converts At= 8,000,000
  4. 4Ownership on Conversion= 6.250
  5. 5Implied Price Using the Cap= 8,000,000
  6. 6Implied Price Using the Discount= 12,000,000
  7. 7Which Term Applies= The valuation cap applies — it is the lower of the two

Assumptions and limits

  • The result is derived only from the 4 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 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • 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.

Frequently Asked Questions

How is SAFE Valuation calculated?

Conversion valuation = the lower of the valuation cap and the discounted round price A SAFE with both a cap and a discount converts on whichever is more favourable to the investor, which is the lower valuation. Ownership is then the investment divided by that conversion valuation.

Why does SAFE Valuation matter?

Founders often model SAFEs at the cap and are surprised when a modest round makes the discount bind instead, or when several SAFEs stack into far more dilution than expected.

What values do I need to enter?

This calculator takes 4 inputs: SAFE investment, Valuation cap, Discount to the priced round, Pre-money valuation of the priced 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.

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