SAFEs and how they convert
Valuation caps, discounts, and what actually happens at the priced round.
Last updated August 3, 2026
The mechanics
A SAFE converts into equity at a future priced round. The conversion price is generally the lower of the price implied by the valuation cap and the price after applying the discount.
Worked intuition
A low cap relative to the eventual round price is the dominant term; the discount only matters when the round prices below or near the cap. Stacking several SAFEs with different caps produces a conversion ladder that is easy to underestimate.
Post-money versus pre-money SAFEs
Post-money SAFEs fix the investor percentage and push all dilution from later SAFEs onto the founders. Pre-money SAFEs share it. Know which paper you are signing.
Use the calculator
The SAFE conversion calculator lets you enter multiple instruments and see the combined effect at a given round price. Results are illustrative only.
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