How It Works
This calculator works in 4 steps.
Enter the converting amount
Type the principal and, for notes, the rate and term to add accrued interest.
Enter the conversion terms
Type the valuation cap, discount, and the capitalization the agreement specifies.
Enter the round price
Type the price per share of the priced round.
Read the results
The calculator returns cap price, discount price, the applied price, shares issued, and resulting dilution.
The Formula
The formula picks the lower of the cap price and the discount price and divides the converting amount by it.
P_cap = Cap / S_capP_disc = P_round × (1 − d)P_conv = min(P_cap, P_disc)S = (Principal + Interest) / P_conv- Cap:
- Valuation cap
- S_cap:
- Capitalization defined in the agreement
- d:
- Discount rate
- P_round:
- Priced-round share price
A $500,000 SAFE with an $8M cap and 20% discount, with 10,000,000 shares in the cap base and a $1.20 round price: cap price $0.80, discount price $0.96. It converts at $0.80 into 625,000 shares.
Conversion Table
The conversion table applies cap and discount terms to 5 convertible instruments.
| Amount | Cap / discount | Round price | Cap price / discount price | Conversion price | Shares issued |
|---|---|---|---|---|---|
| $500,000 | $8M / 20% | $1.20 | $0.800 / $0.960 | $0.800 | 625,000 |
| $1,000,000 | $10M / 20% | $0.80 | $1.000 / $0.640 | $0.640 | 1,562,500 |
| $250,000 | $5M / 15% | $1.00 | $0.625 / $0.850 | $0.625 | 400,000 |
| $2,000,000 | $20M / 25% | $2.50 | $2.000 / $1.875 | $1.875 | 1,066,667 |
| $750,000 | $6M / 20% | $0.50 | $0.500 / $0.400 | $0.400 | 1,875,000 |
Examples exclude interest. Conversion mechanics follow the specific agreement.
What Is the Convertible Security Dilution Calculator?
The Convertible Security Dilution Calculator is a tool that applies stated conversion terms, such as a valuation cap and a discount, to a convertible note or SAFE and returns the conversion price and the shares issued. The holder converts at the lower of the cap price and the discounted round price, when the agreement grants both terms.
Convertible instruments delay the share count until a priced round. The cap price equals the valuation cap divided by the capitalization defined in the agreement, and the discount price equals the round price times (1 − discount). Notes add accrued interest to the converting amount. Agreements define capitalization differently (pre-money or post-money SAFEs, for example), so the calculator asks for the share base the document specifies.
Common Uses
There are 5 main uses of this calculator.
SAFE modeling
Founders estimate shares issued to SAFE holders at the next round.
Convertible note conversion
Finance teams compute accrued interest and conversion shares.
Round planning
Founders see how stacked SAFEs dilute existing holders.
Cap table updates
Lawyers and finance teams update cap tables at closing.
Investor reporting
Investors estimate their post-conversion ownership.