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Get SAFE + cap table explanation
Share your SAFE terms and who owns what. Get a plain explanation of how the SAFE converts, with a before-and-after cap table in your numbers.
River's SAFE + Cap Table Explanation Writer creates plain-English explanations of your SAFE agreement and shows exactly how your cap table works. You provide your raise terms (amount, valuation cap, discount), and the AI writes a complete walkthrough explaining what SAFE means, how the valuation cap and discount work, example scenarios showing dilution, a sample cap table before and after the SAFE converts, and what happens at different exit or funding scenarios. Perfect for first-time founders who need to understand their own fundraising documents.
Unlike legal documents that use confusing terminology, we explain SAFEs in simple terms with specific examples using your actual numbers. The AI breaks down each term clearly (valuation cap, discount, conversion), shows real scenarios (IPO, acquisition, Series A), calculates actual ownership percentages, demonstrates dilution with your specific raise, and answers common founder questions. You get an explanation you can actually understand and share with co-founders or advisors.
This tool is perfect for first-time founders raising on a SAFE, technical founders who don't understand finance, international founders unfamiliar with SAFEs, or anyone who signed a SAFE but doesn't really understand what they agreed to. If your lawyer sent you a SAFE and you just nodded without understanding the implications, this tool helps. Use it before signing or after signing when you need to explain the deal to co-founders, employees, or family.
What SAFEs Actually Mean for Founders
SAFEs (Simple Agreement for Future Equity) are not actual equity yet. They're promises that convert to equity later, usually when you raise a priced round (Series A). The investor gives you money now. You give them the right to get shares later at a discount or capped valuation. This helps founders raise money quickly without setting a company valuation today. The catch: you don't know how much you're giving away until the SAFE converts. The valuation cap and discount determine how much equity investors get. Lower cap means more dilution. Understanding the math before you sign is critical.
Cap tables show who owns what percentage of your company. Pre-money means ownership before investment. Post-money means after. When a SAFE converts at a Series A, the SAFE holders get shares based on the lower of (a) the valuation cap or (b) the Series A price with discount applied. This usually means SAFE investors get better terms than Series A investors because they took earlier risk. You need to model dilution scenarios before raising. Several SAFEs can add up to more dilution than founders expect, so do the math before you sign. Do the math first.
How It Works
Share your terms
Give the SAFE amount, cap and any discount, plus founder shares and the option pool.
River does the math
Conversion is worked out from your figures, with every step of the arithmetic shown.
Read the explanation
Plain-language terms, a before-and-after cap table, and what happens if you sell or close.
Try scenarios in chat
Ask how a different cap, a second SAFE or a bigger round changes your ownership.
What You Get
- Plain-English explanation of your SAFE terms
- Example scenarios showing how conversion works
- Cap table before and after SAFE conversion
- Dilution calculations with your specific numbers
- Common questions answered in simple language
Common questions
Is this legal advice or just an explanation?
Just an explanation. This tool helps you understand how SAFEs and cap tables work using your specific numbers. It's not legal advice and shouldn't replace talking to a lawyer. Think of it as a tutorial that uses your actual terms to make the concepts concrete. You should still have a lawyer review any SAFE before you sign it. This tool helps you ask better questions and understand what your lawyer is telling you. Many founders sign documents they don't understand. This helps you understand before signing.
What's the difference between valuation cap and discount?
Both give investors better terms than later investors. Valuation cap says the investor converts their SAFE as if your company is worth [cap amount], even if it's worth more later. Example: $10M cap, Series A at $20M valuation means SAFE investor converts at $10M (gets 2x more shares). Discount says the investor gets shares at [X]% off the Series A price. Example: 20% discount, Series A at $1/share means SAFE investor pays $0.80/share (gets 25% more shares). Most SAFEs have a cap, or a cap AND discount. Investor gets the better deal of the two.
How much dilution should I expect from a SAFE?
Depends on your raise amount and valuation cap. Quick math: if you raise $500K on a $5M cap, you're giving away roughly 10% ($500K / $5M). But that's simplified. Real dilution happens when the SAFE converts, and it depends on your Series A valuation. If Series A values you at $20M but your cap is $5M, SAFE investors get 4x more shares than their money would buy at Series A prices. Model different scenarios. Many first-time founders are shocked when they see how much they gave away after conversion. Do the math beforehand.
Should I use a valuation cap, discount, or both?
Most SAFEs use a valuation cap only or a cap with a discount. Cap-only is simpler and more common for early rounds. Cap + discount gives investors better terms (they get whichever gives them more shares). Discount-only is rare (usually for smaller raises or very early stage). If you're raising from angels or early VCs, expect them to ask for a cap. Caps vary widely with traction, sector and market conditions. The lower the cap, the more you're giving away. Negotiate caps carefully because they determine your dilution.
What happens if I never raise a Series A?
It depends on the SAFE's wording. Under Y Combinator's standard post-money SAFE, if the company is sold before the SAFE converts, the investor gets the greater of their money back or what their shares would be worth at the cap. If the company winds down, SAFE holders are repaid their investment, as far as money remains, ahead of common shareholders. YC's SAFE carries no interest or maturity date. Check your own version.
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