SAFE / Convertible Note Modeler
Model how a SAFE or convertible note converts against a hypothetical next round — conversion price, shares issued, and exactly how much existing shareholders get diluted.
Deal Terms
The amount being invested under this SAFE or convertible note.
Shares outstanding today, before this SAFE/note converts.
Optional — leave blank if this SAFE/note has no cap.
Optional — leave blank if this SAFE/note has no discount.
A what-if scenario you want to model — not a prediction of your actual next round.
Conversion & Dilution
Enter the investment amount, existing fully-diluted shares, at least a valuation cap or a discount rate, and a hypothetical next-round valuation to see the conversion.
Note: This is a modeling tool only, not legal or tax advice, and does not generate a signable agreement. SAFE/convertible-note mechanics vary by the specific agreement's terms — have a lawyer review your actual term sheet before you sign. Last reviewed August 1, 2026.
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How SAFE & convertible note conversion works
A cap and a discount are the two levers that decide the conversion price — here is how they interact, and where Canadian practice adds its own wrinkles.
What a SAFE is
A Simple Agreement for Future Equity (SAFE) is not debt — it carries no interest rate and no maturity date. It's a right to receive equity later, typically when the company closes a priced round, in exchange for cash today.
What a convertible note is
A convertible note is debt until it converts — it carries an interest rate and a maturity date, and (unlike a SAFE) an obligation to repay if it never converts. Both instruments use the same cap/discount conversion mechanics modeled here.
The valuation cap
A valuation cap sets the maximum company valuation the investment converts against, protecting early money from being priced out by a very large future round. A lower cap means more shares issued to the investor for the same dollars invested.
The discount rate
A discount rate gives the SAFE/note holder a fixed percentage off the price the new-round investors pay — a reward for investing earlier and taking on more risk. Typical discounts run 10–25%, and a SAFE can carry a cap, a discount, both, or neither.
Pre-money vs. post-money mechanics
This tool uses the simpler pre-money-style calculation — cap ÷ shares outstanding before conversion. Many current SAFEs, including Y Combinator's post-money SAFE, define the cap price differently, folding the SAFE's own new shares into the denominator. Read your specific agreement's defined terms closely — this is exactly where the numbers can diverge.
Stacking multiple SAFEs or notes
Raising on more than one SAFE or note before a priced round compounds dilution — each one converts against the same existing share count (or, under post-money mechanics, against each other), so the combined effect is often larger than any single instrument suggests. Model each one, then add the results together.
What is a SAFE, and how is it different from a convertible note?
A SAFE (Simple Agreement for Future Equity) is a right to receive equity later — it has no interest rate and no maturity date, and there is no obligation to repay it as cash if it never converts. A convertible note is debt: it accrues interest and has a maturity date, and if it never converts before maturity the company may owe it back. Both typically convert into equity using the same cap/discount mechanics this tool models.
How does a valuation cap work?
A valuation cap sets a ceiling on the company valuation used to price the investor's conversion, regardless of how high the actual next round is priced. A lower cap is more favorable to the investor — it produces a lower conversion price and more shares for the same dollars invested. If a SAFE/note has a cap but no discount, it always converts on the cap price.
How does a discount rate work, and can a SAFE have both a cap and a discount?
A discount rate gives the SAFE/note holder a fixed percentage off the per-share price the new round's investors pay. Yes — a SAFE or note can carry a cap, a discount, both, or neither. When both are present, standard mechanics convert the investment at whichever produces the lower price per share, since that is more favorable to the investor.
Does this tool generate a SAFE or convertible note I can sign?
No. This tool only calculates and visualizes conversion math — a hypothetical conversion price, shares issued, and resulting ownership percentages. It never produces a document, template, or agreement, and nothing here is drafted or reviewed for your specific deal. The actual SAFE or note you sign needs to be drafted or reviewed by a lawyer.
How are SAFEs and convertible notes taxed in Canada?
Canadian tax treatment of SAFEs and convertible notes differs materially from the US market these instruments originated in — there is no direct Canadian equivalent to a US 83(b) election, and the timing and character of any taxable amount depend on the specific instrument's terms and the Income Tax Act. This tool does not calculate tax. Speak with a Canadian tax advisor and lawyer before you issue or accept one.
Is a valuation cap or a discount better for a founder?
Neither is universally better — it depends on how the company's valuation moves. A cap-only SAFE costs the founder more dilution if the company's value rises sharply before the next round, since the cap doesn't move with it. A discount-only SAFE scales more predictably with the eventual round price. Many SAFEs and notes include both, with the lower-price mechanic controlling at conversion — model your own numbers above to see the trade-off.