SAFE and convertible note calculator

Author:

Reed McBride

Read time:

3 minutes

Published date:

June 24, 2020

If you're fundraising, check out our free SAFE and convertible note calculator to understand the potential future impact before they convert in a priced round.

Contents: Free SAFE and convertible note calculator

Free SAFE and convertible note calculator

While notes and SAFEs can be a great solution for founders, it’s important to understand the potential future impact before fundraising. That’s why we’re thrilled to debut the Carta SAFE and convertible note calculator today.

Our SAFE and convertible note calculator will help you understand the potential dilutive impact of pre-money SAFEs, post-money SAFEs (aka YC SAFEs), and notes once they convert in a future priced round. You can set up your model in seconds and run as many scenarios as you’d like—all you need are a few inputs:

• A few numbers from your current cap table, including your current holdings and the company’s current fully diluted share total
• Any number of notes or SAFEs (in any mix you like)
• Figures for a prospective future fundraise

From there, the calculator will reveal a range of outcomes, modeling how ownership in your company may be distributed across a range of priced round valuations.

A few tips and tricks for using the SAFE and convertible note calculator:

• Observe the impact of post-money SAFEs (aka YC SAFEs) vs. the same amount raised with pre-money SAFEs—you’ll see post-money SAFEs are more dilutive.
• Assume some additional interest for any notes you model (generally these will accrue interest at an agreed-upon rate from issuance until conversion).
• Model the impact of the different available option pool percentages in your priced round—this typically dilutes your ownership percentage and drives down the effective price per share for the round.

If you’re preparing for your first note or SAFE financing round, consider joining Carta Launch (free for companies with up to $1M raised and up to 25 equity holders) to set up your cap table. Launch will help you track all the notes and SAFEs you issue while providing you, your investors, and your counsel (if applicable) with visibility.

Get a full suite of tools to help grow your startup—for free

Create customizable SAFEs, forecast different funding scenarios, and raise your first round. Free for companies with up to 25 stakeholders and $1 million raised.

Author: Reed McBride

Reed McBride joined Carta in 2019 and is VP of Strategic Partnerships + Ecosystem at Carta, and an active early-stage investor. Reed started his career as a start-up attorney at Orrick, advising tech companies on billions of dollars of VC and M&A transactions. He then scaled two start-ups over five years, building new teams and leading a diverse range of functions. Reed holds a BS in Mechanical Engineering with Highest Honors from the University of Illinois and a JD from Berkeley Law, where he graduated Order of the Coif and served on the California Law Review. When he's not at work, you can usually find him on a trail with his three kids.