Round Planner: Founder Ownership After SAFEs, Notes & a Priced Round

A round planner shows what the cap table will look like after your next priced round, once every SAFE and convertible note you have signed turns into shares. Early money is easy to take and easy to forget. Each SAFE or note is a promise of shares later, and the price of those shares is not set until the priced round. Founders who add up the promises only when the term sheet arrives often find they own less than they assumed.

This planner does the sums before you sign. You can try a larger cap, a different pool size or a second SAFE and see the effect on your own stake straight away. Your numbers stay in your browser, and you can save a scenario to a file and open it later.

SAFE

An investor pays you now and receives shares at the next priced round. It carries no interest and no repayment date. It usually has a valuation cap, a discount, or both.

Convertible note

A loan that converts into shares at the next priced round. It carries interest, which is added to the amount that converts, and a maturity date.

Priced round

A round where new investors buy shares at a fixed price per share, set by the pre-money valuation. This is the event that converts every SAFE and note.

The planner assumes every SAFE and note converts in the one round you enter, and that the pre-money valuation includes the shares they turn into. That is the usual way a term sheet is written. If your term sheet says the notes convert on top of the pre-money, expect more dilution than shown here.

A SAFE or note holder gets the lowest of three prices. The first is the round price paid by the new investors. The second is the round price less the discount. The third is the cap price, which is the valuation cap divided by the company's share count. The cap and discount exist to give early money a better price than the new investors, so the holder never pays more than the round price.

conversion price = lowest of: round price · round price × (1 − discount) · cap ÷ shares

• If your round values the company well above the cap, the cap price is the lowest and sets the price.
• If the cap is above your round valuation, the cap does nothing and the discount (if any) sets the price.
• With no cap and no discount, the holder converts at the round price and gets no advantage for going early.

The result table shows, for each instrument, which of the three set its price. If an instrument you thought was capped shows 'Round price', its cap is too high to matter in this round.

The difference is what the cap is divided by. On a post-money SAFE, the cap is measured with every SAFE and note already counted, so the holder's stake before the new money is simply the amount divided by the cap. Later SAFEs dilute the founders, not the earlier SAFE holder. On a pre-money SAFE, the cap is measured on the company before any SAFE converts, so each additional SAFE also dilutes the ones before it.

Check your SAFE document for which kind you signed. The planner treats a convertible note's cap as pre-money, which is the common way notes are written.

Investors usually want an ESOP pool big enough to hire with after the round. Where that pool is created changes who pays for it. If it is created before the round, it sits inside the pre-money valuation, so it dilutes the founders and existing holders and not the new investors. This is often called the option pool shuffle. If it is created after the round, it dilutes everyone, including the new investors.

Because a pool created before the round lowers the real price per share, a headline pre-money valuation can hide a lower effective valuation. Run the same round both ways in the planner and compare your stake.

A term sheet can change ownership in ways a planner cannot see. The planner does not model liquidation preferences, pro-rata rights, most-favoured-nation clauses on SAFEs, anti-dilution terms, founder share vesting or side letters. It also assumes all SAFEs and notes convert in this one round, and that notes accrue simple interest. Use it to understand the size of the dilution and to compare options, and read the signed documents for the exact terms.

In India, early investors are commonly given compulsorily convertible instruments or convertible notes rather than a US-style SAFE document, and foreign investors bring foreign-exchange rules into the structure. The conversion maths is the same, but the paperwork and pricing rules are not. Have a lawyer check the instrument before you sign.

• Run the planner before you sign each SAFE, not after. Adding one more SAFE is the easiest time to change the cap.
• Try the next round at a lower valuation than you hope for. A cap set against a hopeful valuation can bind harder in a flat round.
• Compare the pool created before the round with the pool created after it. The difference is the part of your stake the pool shuffle takes.
• Look at the post-round table, not only the headline percentage. Check who holds what, including the new pool.
• Raise non-dilutive money first where you can. A grant adds cash without adding a row to this table.

• Counting each SAFE's percentage separately and adding them. They convert together, and on a pre-money SAFE each one dilutes the others.
• Forgetting the interest on a note. The amount that converts is the principal plus interest.
• Reading the cap as the company's valuation. It is a ceiling on the price the early investor pays, not a price anyone paid for the company.
• Leaving the pool out. Investors almost always ask for one, and where it sits changes your stake.
• Treating the planner's result as the final cap table. The signed documents decide.