Free tool
SAFE dilution calculator
What percentage of the company your SAFE becomes, before and after the next priced round.
Result
Converts at the cap, paying 44.4% of the round price.
Ownership at conversion
0.500%
Ownership steps down from 0.500% to 0.375% after the round dilutes it.
After the round
0.375%
Stake value
$56,250.00
Illustrative only. This is not investment, tax or legal advice. Check the result against your legal documents.
How this is calculated
What the calculator does. It works out what share of the company your SAFE becomes when it converts, and what that share is after the priced round that converts it.
Which term applies. A SAFE converts at whichever of its terms gives you the most shares:
- The cap. The SAFE prices the company at the valuation cap instead of the round's valuation.
- The discount. The SAFE pays the round price less the discount. A 20% discount pays 80% of the round price.
- The round price. If neither term gives a lower price, the SAFE converts at the same price as the new investors.
The cap and the discount are alternatives. You get the better of the two, never both.
A cap only helps if it prices a share below the round price. For a post-money SAFE that means the cap must be below the part of the round's post-money valuation that the existing holders keep:
the cap applies only if cap < post-money × (1 − new money ÷ post-money − pool increase)
The option pool increase comes out of the existing holders, so a cap equal to the round's pre-money valuation already prices above the round and does not apply. When the cap does not apply, the discount does if there is one, and otherwise the round price.
Post-money SAFE. Your ownership as the SAFE converts is
ownership at conversion = investment ÷ post-money cap
The post-money cap already includes every SAFE converting alongside yours, so other SAFEs do not reduce your share.
Pre-money SAFE. Your ownership as the SAFE converts is
ownership at conversion = investment ÷ (pre-money cap + your investment + other SAFEs converting)
Here the other SAFEs do reduce your share, because they all convert into new shares on top of the cap. This formula assumes the other SAFEs convert on the same cap as yours. If they have different caps, your actual share will differ.
The priced round. The new investors take new money ÷ post-money of the company, and the option pool increase takes its stated percentage of the post-money. Everyone who held shares before the round, your SAFE included, keeps what is left:
ownership after the round = ownership at conversion × (1 − new money ÷ post-money − pool increase)
where post-money = pre-money valuation + new money.
Value of your stake. Your ownership after the round times the round's post-money valuation. This is the value at the price the new investors paid, not a price you could sell at.
What this leaves out. Interest, pro rata rights, most favoured nation clauses, and SAFEs with different terms from yours. The result is illustrative. Check it against your SAFE and the round's documents.
Guide
What the tool answers: what share of the company your SAFE becomes, and what that share is worth after the round that converts it.
What SAFE dilution actually means
A SAFE does not give you a percentage of a company. It gives you the right to shares later, on terms agreed now. What percentage those shares turn out to be depends on the round that converts them and on what converts alongside you.
Two numbers matter, and they are not the same.
Ownership at conversion is your share the moment the SAFE becomes equity. Ownership after the round is your share once the new money and the option pool have taken theirs. The second is what you actually own. The first is where you start.
A worked example
You put $25,000 into a SAFE with a $5,000,000 post-money cap and no discount. The company later raises $3,000,000 at a $12,000,000 pre-money valuation, with a 5% option pool increase.
Your SAFE converts at the cap, because the cap prices the company below the round does. That gives you $25,000 ÷ $5,000,000, or 0.500%.
Then the round dilutes you. The new investors take $3,000,000 of a $15,000,000 post-money company, which is 20%. The option pool increase takes another 5%. Everyone who held shares before the round keeps the remaining 75%, you included.
0.500% × 0.75 = 0.375%. At the round's own price, that stake is worth $56,250.
Both of those figures are worth sitting with. You turned $25,000 into something the new investors value at $56,250. You also own under half a percent of a company you backed when nobody else would.
A cap is a ceiling, not a bargain
A cap only helps if it prices your shares below what the new investors pay. That sounds obvious and it catches people out, because the threshold is lower than you would guess.
In the round above, a cap stops helping below $11,250,000, not $15,000,000. The option pool increase comes out of the existing holders rather than the new investors, so it eats into the advantage the cap was supposed to give you. A $12,000,000 cap, equal to the round's pre-money valuation, does nothing at all: you convert at the same price as everyone else.
If your cap does not apply, your discount does, if you have one. If you have neither, you are an ordinary investor in that round who committed early.
Post-money and pre-money are different instruments
Since 2018 the standard YC SAFE has been post-money, and the difference matters more than the name suggests.
A post-money SAFE fixes your share at signing. $25,000 on a $5,000,000 post-money cap is 0.500% at conversion, whatever other SAFEs convert beside you. The founder absorbs that dilution, not you.
A pre-money SAFE does not. The same $25,000 on the same $5,000,000 cap gives you 0.455% if $475,000 of other SAFEs convert with you, and 0.341% after the round rather than 0.375%. Every SAFE the founder signs after yours makes your share smaller.
If you do not know which kind you hold, look at the top of the document. It says so.
Common mistakes
Treating ownership at conversion as what you own. It is the number before the round dilutes you, and the round is usually what triggers the conversion in the first place.
Assuming a post-money SAFE protects you from everything. It protects you from other SAFEs. It does not protect you from the priced round, the option pool, or anything that comes after.
Reading the stake's value as cash. $56,250 is what your shares are worth at the price the new investors just paid. It is not a price anyone has offered you.
Questions
Do other SAFEs dilute mine?
Only if yours is pre-money. A post-money cap already includes every SAFE converting alongside you, so the founder bears that dilution. A pre-money cap does not, and each additional SAFE reduces your share.
Should I want a cap or a discount?
Usually a cap. A discount gives you a fixed percentage off whatever the round price turns out to be, so it pays most when the round is small. A cap pays most when the company does well, which is the case you are investing for. Where you have both, you get whichever gives you more shares, never both.
What if the company never raises a priced round?
Your SAFE does not convert. It is not a loan, so there is nothing to repay and no interest accruing. If the company is acquired first, the SAFE's own terms decide what you receive, and those vary. If it quietly stops trading, you lose what you put in.
Why is my ownership so small when I invested early?
Because early valuations are low in absolute terms, not because you were treated badly. $25,000 into a company capped at $5,000,000 buys half a percent. The point of angel investing is not the percentage you start with; it is what that percentage is worth if the company becomes large.
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