SAFE vs Convertible Note Calculator
Compare pre-money SAFE, post-money SAFE, and convertible notes side by side. See actual dilution, effective price per share, and founder ownership after conversion.
Most founders negotiate SAFEs and convertible notes without fully understanding how dilution differs between instrument types. A post-money SAFE dilutes differently than a pre-money SAFE, which dilutes differently than a convertible note. Miss the nuance and you could leave 5-10% on the table in founder ownership.
This calculator shows the exact dilution impact of each instrument type. Model how post-money SAFEs give investors fixed ownership, how pre-money SAFEs stack and compound dilution, and why convertible notes sometimes favor founders despite carrying interest. Get the real numbers before you sign.
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Understanding SAFE vs Convertible Note Dilution
The choice between a SAFE and convertible note shapes your cap table more than most founders realize. Each instrument has different mechanics and implications for founder ownership after conversion.
Post-Money SAFE: The Modern Default
Post-money SAFEs lock in the investor's ownership percentage upfront. If you issue a $500K post-money SAFE on an $8M valuation cap, the investor gets 5.9% ownership when the SAFE converts, regardless of how many other SAFEs you issue afterward. This protects later SAFE holders from pro-rata dilution. It's the Y Combinator standard and the most common structure since 2020.
Advantage for Founders
- If you raise multiple post-money SAFEs, earlier investors don't get diluted by later ones
- Simpler cap table math—you know the ownership percentages upfront
- Easier to explain to future investors
Disadvantage for Founders
- If you issue many post-money SAFEs, they all convert at once and dilute founders together
- Founders see cumulative dilution at the next priced round, not incremental across multiple SAFEs
Pre-Money SAFE: Founder-Friendly But Stacks Dangerously
Pre-money SAFEs dilute all existing shareholders proportionally when they convert. This includes earlier SAFE holders. Issuing three pre-money SAFEs means each one dilutes the others, compounding ownership loss. Pre-money SAFEs are less common today because the math is complex and harder to explain to future investors.
Advantage for Founders
- Each SAFE converts at the lower of the cap or discount price, giving early investors less ownership
- The first SAFE dilutes proportionally, not absolutely, protecting founders slightly
Disadvantage for Founders
- Multiple pre-money SAFEs compound dilution—each SAFE reduces everyone's ownership
- Hard to explain and calculate accurately
- Investors often dislike pre-money because the math is unfamiliar
Convertible Note: Debt with Interest and Maturity
A convertible note is debt that converts to equity at the next funding round. Unlike SAFEs, notes carry an interest rate (typically 2-8%) and a maturity date (usually 2 years). If the maturity date passes without a qualified round, the note becomes actual debt you owe.
Advantage for Founders
- If your company doesn't raise another round, it's debt—not forced equity dilution
- Maturity date creates urgency for the next round
- Sometimes investors favor notes, especially in hot markets
Disadvantage for Founders
- Interest accrues, inflating the conversion amount—$500K at 6% interest becomes $530K at maturity
- Actual debt obligation if no qualified round occurs by maturity
- More complex than a SAFE
Typical SAFE and Convertible Note Terms
How to Use This Calculator
Step 1: Select Your Instrument Type
Choose pre-money SAFE, post-money SAFE, or convertible note. Most modern companies use post-money SAFEs.
Step 2: Enter Your Investment Details
Fill in the investment amount, valuation cap, and discount rate. These are negotiated terms that vary by stage and investor.
Step 3: Model Your Next Round
Enter the pre-money valuation and investment size for your next round. This is when the SAFE or note converts to equity. You can model conservative or aggressive scenarios.
Step 4: Compare Results
The calculator shows your investor's ownership percentage after conversion, your remaining founder ownership, and the effective price per share. Use this to compare different instrument offers or negotiate better terms.
Key Metrics Explained
SAFE Investor %
The percentage ownership the SAFE investor receives after conversion at the next funding round. This assumes the next round fully converts the SAFE. Higher percentages mean more dilution to founders.
Founder % After
Your remaining founder ownership after the SAFE/note converts and new investors take their shares in the next round. This is what you actually own post-dilution.
Effective Price per Share
The per-share price the SAFE investor effectively pays after considering the cap, discount, or conversion mechanics. Lower prices mean investors get more shares for the same dollar amount.
Frequently Asked Questions
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