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SAFEs and Notes

Best practices on working with SAFEs and Notes.
SAFEs and Convertible Notes Conversions can be entered in two methods depending on your preference. Both approaches are equally valid.

Method 1: Enter Ownership Update

Step 1: Enter the SAFE / 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)
  • If the SAFE / Note has already converted, proceed to Step 2. Otherwise, click Save

Step 2: Enter the Priced Round

  • Use the New Round option to add a new round. Specify the terms of this new priced round (i.e. investment amount, round sizes and valuations)
Step 3: Add Ownership Update
  • Finally, add an Ownership Update event after the priced round to tell Tactyc your ownership post-conversion after the priced round.
  • Note you can also use the provided Cap Table Calculator to calculate the impact of SAFEs and Notes to help determine the value of Ownership Update to be entered.

Method 2: Enter Number of Shares

If you have the cap table details post-conversion, you can also define a SAFE conversion by directly entering the number of shares to the fund post-conversion.

Step 1: Enter the SAFE Round

  • Select the Security Type as SAFE or Note when entering the SAFE/Note round and enter the investment amount, round size and valuation cap. If the SAFE / Note has already converted, proceed to Step 2. Otherwise, you can click Save and you’re done.
Step 2: Enter the Priced Round in Share Mode
  • Add another round, set the security type to a priced security (preferred or common)and turn on the share mode using the Enter Share Data option
  • 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.
  • Enter a valuation cap of prior round's valuation cap + new round size. This would hold the investment's FMV constant