SAFE (Simple Agreement for Future Equity) Calculator

Calculate exactly what equity you receive from a SAFE investment. See how valuation caps and discounts affect your ownership percentage.

Amount invested via SAFE

Maximum valuation for conversion

Optional discount on future round price

Right to invest in future rounds to maintain ownership

Gets same terms as future investors if better

Post-money valuation of the round that triggers SAFE conversion

Total shares before SAFE conversion

Post-Money = Pre-Money + Investment\nConversion Price = MIN(Base Price, Discounted Price, Capped Price)\nShares = Investment / Conversion Price\nOwnership % = New Shares / (Existing + New Shares)
Investment: $250,000 | Cap: $5M | Discount: 20%\nTriggering Round: $10M Post-Money | 10M Existing Shares\n\nPre-Money = $10M - $250K = $9.75M\nBase Price = $9.75M / 10M = $0.975\nDiscounted = $9.75M × 80% / 10M = $0.78\nCapped = $5M / 10M = $0.50\nConversion = $0.50/share\nShares = $250K / $0.50 = 500,000\nOwnership = 4.76%

What is a SAFE?

SAFE stands for Simple Agreement for Future Equity. Created by Y Combinator, it's a simplified alternative to convertible notes. Investors give money now and receive equity later when a priced round occurs or other triggering events happen. No interest, no debt.

How is a SAFE different from a convertible note?

Key differences: (1) SAFE is equity, not debt - no maturity date or interest, (2) Conversion happens at future priced round, not at a specific date, (3) Simpler documentation with fewer terms, (4) No obligation to pay back if company fails. Many seed investors now prefer SAFEs.

What does "valuation cap" mean on a SAFE?

The cap is the maximum valuation at which the SAFE converts to equity. If the cap is $5M and the company raises at $10M pre-money, the SAFE converts as if the company is worth $5M. This gives early investors more shares and protects against excessive dilution from later rounds.

What is a discount on a SAFE?

A discount gives SAFE holders shares at a percentage discount to the next round's price. A 20% discount means if Series A prices shares at $1, SAFE holders convert at $0.80. This compensates for the earlier risk and provides upside before the "downside protection" of the cap.

What are pro rata rights?

Pro rata rights (also called preemptive rights) let SAFE holders invest in future rounds to maintain their ownership percentage. Without pro rata, their ownership gets diluted when new investors come in. Most sophisticated investors request pro rata to preserve their stake.

What is Most Favored Nation (MFN)?

MFN means if the company issues SAFEs with better terms later (higher cap, bigger discount), the earlier investor gets those better terms automatically. This protects early investors from being "outgunned" by later investors and encourages early support of the company.

When does a SAFE convert?

SAFE conversion triggers: (1) Next priced financing round (equity raise with stated valuation), (2) Change of control (acquisition/merger), (3) IPO, (4) Company requests conversion. There's no maturity date since it's not debt - it waits for a liquidity event.

How do I calculate SAFE ownership percentage?

Ownership % = SAFE Investment / Conversion Price. If $250K investment at $1/share = 250K shares. If company has 10M existing shares post-money, investor owns 250K/10.25M = 2.44%. The formula accounts for new shares created and the total shares outstanding after conversion.