Calculator
SAFE vs note calculator
The same check written three ways converts into different numbers of shares. This calculator puts them side by side.
A "$10 million cap" means different things on a post-money SAFE, a pre-money SAFE and a convertible note. This calculator takes one investment with one headline cap and converts it all three ways into the same priced round, so you can see the difference in shares, price and ownership. It runs in your browser; nothing is sent anywhere.
| Post-money SAFE | Pre-money SAFE | Convertible note | |
|---|---|---|---|
| Amount converting | $1,000,000 | $1,000,000 | $1,090,000 |
| Converts at | valuation cap | valuation cap | valuation cap |
| Conversion price | $0.9000 | $0.9176 | $0.9164 |
| Shares received | 1,111,111 | 1,089,799 | 1,189,436 |
| Investor after the round | 7.40% | 7.27% | 7.86% |
| Founders after the round | 59.94% | 60.06% | 59.49% |
| Round price per share | $1.9979 | $2.0019 | $1.9831 |
Turn on JavaScript to run the comparison with your own numbers; the worked example below uses the default inputs.
The default example, explained
$1 million with a $10 million cap, into a company with 10,000,000 fully diluted shares that raises $6 million at $24 million pre-money with a 10% pool after the round:
- Post-money SAFE: owns $1 million ÷ $10 million = 10% of the post-SAFE company: 1,111,111 shares at $0.9000, 7.40% after the round.
- Pre-money SAFE with the same $10 million cap: the cap is divided by the shares before the SAFE but including the new pool, so it converts at $0.9176 into 1,089,799 shares, 7.27% after the round.
- Convertible note, pre-money cap, 6% for 18 months: $1,090,000 converts at $0.9164 into 1,189,436 shares, 7.86% after the round.
Two opposite effects separate the pre-money and post-money SAFE. A pre-money cap is measured before the SAFE money, so a $10 million pre-money cap is roughly an $11 million post-money cap here, which favors the company. But its share count includes the next round's option-pool increase, which favors the investor. In this example the first effect wins and the pre-money SAFE converts into fewer shares; with a larger pool increase or a smaller SAFE it can go the other way. The note's cap works like the pre-money SAFE's, and it receives the most shares only because $90,000 of interest converts too. The detailed comparison is on SAFE vs convertible note and pre-money vs post-money SAFEs.
Assumptions
- One instrument converts into one priced round; the pool increase is in the pre-money.
- Pre-money SAFE and note caps divide by existing fully diluted shares plus the pool increase, excluding converting securities (YC's original-SAFE definition). Real notes vary.
- Simple interest on the note, converting with principal. A discount, if entered, applies to all three; each converts at whichever price gives more shares.
Sources
- Post-Money Safe User Guide, Y Combinator. Cited for facts; not reproduced.