What is SAFE note?
A SAFE note (simple agreement for future equity) is an investment contract where an investor gives money now and receives shares later, usually at the next priced round, often with a valuation cap or discount.
Example
An angel invests $100,000 on a SAFE with an $8M valuation cap. When the company later raises at a $16M valuation, the angel's money converts as if the price were $8M, buying twice as many shares.
Why it matters for early-stage founders
SAFEs are the most common way to raise pre-seed money: fast, cheap and without setting a valuation today. But they still dilute you when they convert.
The common mistake
Stacking several SAFEs without tracking how they convert. Founders are often surprised by how much they own after the first priced round.
See what a SAFE costs you
The free Equity Dilution calculator shows your ownership after investments convert.
Try the calculatorRelated terms
Reviewed October 12, 2026