Two conversion prices. One governing term.
A SAFE is an agreement for future equity. In a priced round, its contractual terms determine how the investment converts into shares. In this simplified pre-money model, a valuation cap and a discount each imply a price per share; the lower price gives the SAFE holder more shares.
A pre-money SAFE is different from a post-money SAFE. Capitalization definitions, multiple instruments and option pool increases can change conversion economics. Use the actual document’s definitions when preparing a financing cap table.
The formula, made clear.
- SAFE shares
- SAFE investment divided by the applicable conversion price.
- New round shares
- New round investment divided by the negotiated new investor share price.
- Post-round ownership
- SAFE shares ÷ (existing shares + SAFE shares + new round shares).
Put the numbers in context.
A $500,000.00 SAFE has a $5M cap and 20% discount. With 1m existing shares and an $8.00 round price, cap price is $5.00 and discount price is $6.40. It converts at $5.00 into 100,000 shares. After a $2M new round, it owns 7.41%.
| Input | Example value |
|---|---|
| SAFE investment | $500,000.00 |
| Pre-money valuation cap | $5,000,000.00 |
| Conversion discount | 20% |
| Existing fully diluted shares | 1,000,000 shares |
| New investor share price | $8.00 |
| New round investment | $2,000,000.00 |
| SAFE ownership after the round | 7.41% |
What this calculation assumes
A single hypothetical pre-money SAFE with both cap and discount. Existing capitalization excludes this SAFE and new financing shares. The round share price is an independent input. No interest, other instruments or pool top-up. This is not a YC post-money SAFE model.
What to consider next.
Check the instrument version and company-capitalization definition before applying the result to a real financing.
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