How Value8 Handles SAFEs and Convertible Notes

Tracking SAFEs and notes on the cap table

Value8 Cap Table records SAFEs and convertible notes as their own instrument type, alongside share classes, options, and warrants, rather than as a generic memo line. Adding one (Working Data → Equity Structure → Notes) captures the terms that drive its conversion later:

• Instrument type: Pre-Money SAFE, Post-Money SAFE, or Convertible Loan.
• Principal or purchase amount, and for a SAFE, whether it carries an MFN ("most favored nation") clause.
• Valuation cap (called the conversion cap on a note) and conversion discount, the two terms that set the instrument's conversion price.
• For a Convertible Loan specifically: interest rate and maturity date, since a note (unlike a SAFE) is debt that accrues interest and comes due.

Issuing the instrument to a specific investor, and recording what happens to it later, is a separate step from defining its terms: issuance is tracked from Working Data → Transactions → Notes, which is also where a note's accrued interest and conversion status get recorded against the specific holder.

Modeling conversion in a priced round

Value8's Equity Planner (Actions → Scenario Modeling → Equity Planner in the Cap Table app) projects exactly what happens to every outstanding SAFE and note, and to every existing holder's ownership, if the company were to close a specific hypothetical priced round, before that round is real. Given a pre-money valuation, the amount being raised, and any option-pool target, the engine:

1. Resolves MFN clauses first. Every MFN SAFE adopts the most favorable valuation cap and discount available among SAFEs issued after it, before any conversion math runs, following the standard MFN temporal rule (only later-issued instruments' terms are eligible to be adopted).
2. Prices each instrument at the better of its capped or discounted conversion price: the cap price is the valuation cap divided by the relevant fully diluted share count (pre-round shares for a pre-money instrument; pre-round shares plus all converting SAFE shares for a post-money SAFE), and the discount price is the round's own share price reduced by the instrument's discount percentage. Whichever price is lower wins, so a capped-and-discounted instrument never pays a discount on top of its already-capped price. A convertible note's converting balance includes its accrued interest; a note's discount, unlike at an acquisition or IPO exit, is fully operative at a priced round, on the same better-of basis as a SAFE's.
3. Solves post-money SAFEs, the new preferred shares, and the round's option-pool increase together, since each depends on the company's resulting total share count, which in turn depends on all of them. The engine iterates to a single stable share price and share count rather than solving instruments one at a time; a round whose terms can't all be satisfied simultaneously (for example, SAFE and note claims that, combined with a target option pool, would exceed the company) is rejected outright rather than returned as a partial or inconsistent result.
4. Adjusts existing preferred stock with anti-dilution protection when the modeled round prices below an earlier round, under that series' own anti-dilution terms.

The same engine also prices existing and new coverage warrants into the resulting fully diluted count, so the Equity Planner's output reflects the full capital structure, not SAFEs and notes in isolation.

What the output shows

The Equity Planner displays the modeled round's resulting share price, each converting SAFE's and note's resulting share count, the post-money fully diluted share count, and the resulting dilution percentage for existing holders, broken out from the combined effect of converting SAFEs/notes, the new round's investors, and the option pool increase. The modeling in-app also documents, step by step, exactly which formula produced each number, so a founder or finance lead reviewing a projected round isn't looking at an opaque output.

Running this against the company's own live, current cap table data (its actual outstanding SAFEs, notes, share classes, and option pool) rather than a standalone spreadsheet means every modeled round starts from the same numbers already on file, with no re-entry step. Modeling a round in the Equity Planner does not itself change the live cap table; it's a projection, run before a round is actually negotiated or closed.

Where this fits with the rest of Value8

SAFE and convertible-note data recorded here is part of the same capitalization dataset Value8 uses elsewhere: it feeds a 409A valuation's allocation of equity value across the full capital structure, and the same conversion mechanics described above apply, with SAFE- and note-specific adjustments, when a company models an actual exit (acquisition or IPO) rather than a priced financing round.

What this page does not claim

• This page describes Value8's own cap table and modeling product, not legal or financial advice about how any specific SAFE or note agreement should be drafted or interpreted.
• No claim is made here about pricing or which product tier includes the Equity Planner; see pricing for current tiers, and the verification note above.
• This page describes the Equity Planner's round-modeling calculation, not a claim that modeled results post automatically to the live cap table without a separate, confirmed recording step.