SAFEs and Notes
Best practices on working with SAFEs and Notes.
Entering a SAFE or Convertible Round
Define the Security Type as SAFE or Note when defining the round.
Enter the amount invested under the Investment Amount field. Total capital raised by the company in the SAFE/Note is entered as the Round Size. Specify the Valuation Cap (see here for uncapped notes)
That's it. The round now reflects a SAFE or convertible note.
If the note has not converted yet.
How to determine ownership post-conversion after a priced round? Your conversion depends on the valuation of the priced round and whether other competing notes or SAFEs exist. We recommend using the Cap Table Calculator to determine the projected conversion after a priced round.
Use the New Round option to add a new priced round in the future. Specify the terms of this new priced round (i.e. investment amount, round sizes and valuations)
Use the provided Cap Table Calculator to configure a cap table simulation where you can configure existing SAFEs and Notes along with parameters of the future priced round. The results of the conversion will be shown in the Pro-Forma Cap Table. You can apply the results of this simulation by clicking on the + Ownership Update button next to your fund's ownership.
This will create an Ownership Update event after the round selected. This ownership update represented the conversion of the SAFE/Note and the ownership in the company post-conversion.
If the note has already converted.
If the note has converted, we need to tell Tactyc what the fund's ownership is in the company post-conversion. There are two ways of doing this.
Method 1: Apply an Ownership Update
Apply an ownership update after the priced round and enter the fund's ownership in the company post-conversion in the Ownership Update
Method 2: Edit Shares in the Priced Round
If you have the cap table details post-conversion, you can also define a conversion by directly entering the number of shares to the fund post-conversion in the priced round.
Edit the priced round and enable Enter Share Data
Enter the following:
Share Price: The price of the round
New Shares Purchased: New shares purchased by the fund in this round
Total Shares Owned: Total shares owned by the fund after this round
New Shares Issued: Total new shares issued by the company in this round to all investors
Fully Diluted Shares Outstanding: Total shares outstanding after this round
Tactyc will now automatically calculate your correct ownership to reflect the SAFE / Note conversion
Uncapped SAFEs or Notes
Tactyc requires a valuation at each round, so the system can calculate the latest FMV based on the last valuation. If a SAFE or Note were uncapped we recommend one of these 2 approaches:
Enter a valuation cap you expect to convert at. This is typically the valuation of the next round. You may want to enter a note for this round to say "This is an uncapped SAFE. We currently expect to convert at [$x]mm". This is for reporting purposes.
Enter a valuation cap of prior round's valuation cap + new round size. This would hold the investment's FMV constant
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