What your SAFE actually converts into

A SAFE is not equity when you sign it. It is a right to equity later, at a price set by whichever is better for the investor: the valuation cap, or a discount to the priced round. The calculator above resolves both and shows what is left afterwards.

The number founders usually want is not the conversion price. It is ownership after the round, which is the only figure that answers what the SAFE actually cost.

Cap or discount, whichever is better

Most SAFEs carry both. The cap sets a maximum valuation at which the money converts; the discount takes a percentage off the round price. The investor gets the better of the two, which in a strong round is almost always the cap.

Worked through: on a $8M cap with 10,000,000 existing shares, the cap implies $0.80 a share. A $20M pre-money round on the same share count prices at $2.00, and a 20% discount takes that to $1.60. The cap wins, so $500,000 converts at $0.80 into 625,000 shares — not the 312,500 the round price would have bought.

Post-money and pre-money caps are not the same instrument

This is the distinction that surprises founders most, and it is not a detail.

• A post-money cap — the standard Y Combinator form since 2018 — fixes the investor's percentage of the company after all SAFEs convert. Their share is locked; later SAFEs dilute the founders, not them.
• A pre-money cap leaves the percentage floating. Every additional SAFE dilutes the earlier ones too, so the group shares the effect.

The practical consequence: with post-money SAFEs, stacking several rounds of them dilutes founders more than the headline numbers suggest, because each new SAFE's percentage is protected. Run every SAFE through the calculation before signing the next one.

What this calculator does not model

Real cap tables are messier than one SAFE and one round. Three things in particular change the answer:

1. The option pool. Investors usually require the pool to be topped up before the round, out of the pre-money — which means the existing shareholders bear it.
2. Multiple SAFEs at different caps. Each converts at its own price, and together they can take a much larger slice than any one of them suggests.
3. Pro-rata and side letters. Rights to participate in later rounds change the picture beyond this one event.

Treat the output as the shape of the answer, not the closing number. The definitive version is your counsel's cap table with every instrument in it.

Where Zinance fits

A SAFE converting is an accounting event as well as a legal one, and a cap table that does not reconcile to the ledger is one of the more common reasons a Series A diligence process stalls. We keep the two agreeing — see bookkeeping.

Frequently asked questions