SAFE Note Calculator

How to use the SAFE calculator

1. SAFE investment: the money invested on the SAFE. If you have several SAFEs with the same terms, add them together. If the terms differ, run each one separately.
2. Post-money valuation cap: the highest company value the SAFE can convert at. Leave it empty or enter 0 if the SAFE has no cap.
3. Discount: the percentage off the round price the SAFE holder gets. Enter 0 if there is none.
4. Priced round pre-money valuation: what new investors agree the company is worth before their money goes in. You will not know this until the round happens, so try a low, a middle and a high guess.
5. New money raised: the cash the new investors put in at that round.
6. Shares before the SAFE converts: founder shares plus any option pool. This only changes the share counts and prices, not the percentages.

The result shows who owns what after the round: the SAFE holder, the new investors, and you with the other existing holders. It also tells you whether the cap or the discount decided the price. If SAFE is a new word for you, read the glossary page first.

The SAFE conversion formula

This calculator uses the post-money SAFE, the version Y Combinator publishes and has used as its standard since 2018. On its SAFE documents page, Y Combinator puts the cap rule this way: on a post-money valuation cap SAFE, the ownership sold equals the investment divided by the valuation cap. The same page says a SAFE has no interest and no maturity date, which is the main way it differs from a convertible note.

Share counts follow from the percentages. SAFE shares = existing shares x SAFE ownership / (1 - SAFE ownership). The round price per share is the pre-money valuation divided by all shares after the SAFE converts, and the SAFE price per share is the conversion valuation divided by that same share count.

A worked example

Say an angel puts $500,000 into your company on a SAFE with a $5,000,000 post-money cap and a 20% discount. You have 9,000,000 shares. A year later you raise $2,500,000 in a priced round at a $10,000,000 pre-money valuation.

The angel paid $0.50 a share while the new investors paid $1.00, so the $500,000 stake is worth $1,000,000 at the round price. That gap is the reward for investing early. Now change the pre-money valuation to $6,000,000. The discount valuation becomes $4,800,000, which is under the cap, so the discount applies instead and the SAFE holder gets about 10.42% before the new money.

How to read the result before you sign

• Look at your own row first. The founders' share is the number that changes your life. Run the round you hope for and the round you fear, and see how far apart they are.
• Add up every SAFE. Each post-money SAFE takes its slice from the existing holders, not from the other SAFEs. Three SAFEs that each sell 7% cost you 21% before the priced round even starts. Keep the total on a cap table from day one.
• A higher cap means less dilution, but only if you can reach it. If your priced round comes in below the cap, a SAFE with a discount converts at the discounted round price, and a cap-only SAFE simply converts at the round price.
• Raise what you need for the next proof point. Money raised before you have evidence tends to be the most expensive, because a low cap sells more of the company for the same check. Talking to customers and validating the idea first gives you something to point to when you argue for a higher cap.
• Model the next round too. Use the equity dilution calculator to see what several rounds in a row do to your share.

If you are not yet at the fundraising stage, the more useful work is the case you will show investors. Fonda's journey has a Raise step in its Scale phase, after you have tested the idea with real customers and written the business plan. It is free to start, with no card required, and paid use is by one-off credit packs: see pricing.

What the calculator leaves out

• Option pool increases. New investors often ask you to enlarge the employee option pool before they invest. That dilutes founders and SAFE holders further and is not modeled here.
• How the round valuation is defined. The calculator treats the priced round's pre-money valuation as including the converted SAFE shares, which is the common approach with post-money SAFEs. If your term sheet defines it differently, the percentages shift.
• Pre-money SAFEs. The older pre-money SAFE spreads dilution differently when there are several SAFEs. Check which version you signed.
• Cap and discount together. Y Combinator's current standard forms are cap only, discount only, or most favored nation (MFN) with neither. A SAFE with both is a custom document, so read how yours words the choice. MFN terms, pro rata rights and side letters are not modeled.
• Convertible notes. Notes add interest and a maturity date, so the amount converting grows over time.
• A sale or shutdown before a priced round. A SAFE pays out differently in those cases.
• Rounding and legal detail. Real conversions round share counts and follow the exact wording of your documents. This is an estimate for planning, not legal or tax advice. Ask a startup lawyer to check the numbers before you sign.