Valuation Cap Calculator – SAFE & Convertible Notes
Calculate the effective conversion price of a SAFE or convertible note at a priced round. Enter the valuation cap and pre-money valuation to find the conversion price.
The conversion uses the LOWER of:
- Valuation Cap
- Pre-Money Valuation
Results
Enter values and click Calculate to see results
How to Calculate SAFE Conversion
Enter Valuation Cap
Input the maximum valuation from your SAFE or convertible note agreement.
Add Pre-Money Valuation
Enter the company's pre-money valuation at the Series A or priced funding round.
Get Conversion Terms
See your effective valuation, share price, and discount percentage at conversion.
Why Use This Valuation Cap Calculator
SAFE & Note Support
Works with both SAFE agreements and convertible notes that have valuation cap provisions.
Effective Discount Calculation
Automatically calculates your real discount percentage based on cap vs. actual valuation.
Share Count Estimation
Estimates the number of shares you'll receive based on your investment amount.
Conversion Price Comparison
Compare your conversion price to the new investor price to see your advantage.
Valuation Cap Scenarios
| Your Cap | Series A Pre-Money | Conversion Valuation | Effective Discount |
|---|---|---|---|
| $5M | $10M | $5M (cap) | 50% |
| $8M | $12M | $8M (cap) | 33% |
| $10M | $8M | $8M (pre-money) | 0% (no benefit) |
| $5M | $20M | $5M (cap) | 75% |
Frequently Asked Questions
What is a valuation cap in a SAFE?
A valuation cap is the maximum company valuation at which your SAFE investment converts to equity. If the company's actual valuation exceeds the cap, you convert at the lower cap valuation, giving you more shares for your investment.
How does a valuation cap benefit investors?
The cap rewards early investors for taking more risk. If you invest at a $5M cap and the company raises Series A at $20M, you convert at $5M—effectively getting a 75% discount compared to new investors.
What happens if the valuation is below the cap?
If the Series A valuation is lower than your cap, you convert at the actual (lower) valuation. The cap only helps when the company performs better than expected.
What's a typical valuation cap for startups?
Early-stage caps range from $3M-$15M depending on market, team, and traction. Seed-stage companies often have $5M-$8M caps, while hot startups in competitive markets may have $10M-$20M+ caps.
How is the conversion price calculated?
Conversion Price = Conversion Valuation ÷ Fully Diluted Shares Outstanding. If a company has 10M shares and converts at $5M valuation, the price is $0.50 per share. Your $100K investment buys 200,000 shares.
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