SAFE Note Calculator
Model how your SAFE converts to equity at the next priced round. Enter the SAFE terms and round details to see your ownership percentage. Everything runs in your browser, nothing is stored.
Enter a valuation cap, a discount rate, or both. When both are provided, the SAFE converts using whichever gives the investor more equity.
What is a SAFE note?
A SAFE (Simple Agreement for Future Equity) is an investment instrument where an investor gives a startup money today in exchange for the right to receive equity at a future priced round. The investor does not become a shareholder immediately. Conversion happens when the startup raises its next priced equity round.
SAFEs are popular at pre-seed and seed stages because they are faster to close, cheaper to draft, and avoid valuation negotiations upfront. The original SAFE was created by Y Combinator in 2013.
How does a SAFE convert to equity?
Cap path effective valuation = Valuation cap
Discount path effective valuation = Next round pre-money x (1 - Discount rate)
SAFE converts at whichever gives the investor the lower price (more equity)
Equity % = SAFE amount / (Effective valuation + SAFE amount)
For example: a SAFE of INR 25L with a INR 1Cr cap and a 20% discount, where the next round closes at INR 3Cr pre-money. Cap path gives INR 1Cr, discount path gives INR 2.4Cr. The cap wins, and the SAFE investor converts at INR 1Cr, receiving 20% equity before the new round money comes in.
What is a valuation cap on a SAFE?
A valuation cap sets the maximum valuation at which a SAFE converts. If the next round is priced above the cap, the SAFE investor still converts at the cap valuation, giving them more equity than investors paying full price in the new round. Caps reward early investors who took the most risk.
In India, typical pre-seed SAFE caps range from INR 3Cr to INR 15Cr depending on the founding team, sector, and traction.
What is a discount rate on a SAFE?
A discount rate gives the SAFE investor the right to convert at a percentage below the price paid by investors in the next priced round. A 20% discount means the SAFE investor pays INR 0.80 for every INR 1 paid by new investors. This rewards the early investor for taking risk before the company was formally valued.
Cap vs discount: which one applies?
When a SAFE has both a cap and a discount, the mechanism that gives the investor a lower effective price per share is used. If the next round is priced well above the cap, the cap path almost always wins. If the round is priced close to or below the cap, the discount path may give a lower price. Investors benefit from having both terms in the SAFE.
Are SAFEs used in India?
SAFEs are increasingly used by Indian early-stage startups, especially those influenced by YC, Antler, and AJVC norms. However, Indian investors and lawyers sometimes prefer convertible notes (which accrue interest and carry a maturity date) or direct equity rounds, due to familiarity and regulatory clarity under FEMA and the Companies Act. Founders should verify SAFE enforceability with an Indian legal counsel before signing.