Funded is not converted. The gap between them is usually measured in years.
A SAFE converts when a trigger defined in the document occurs: usually a priced equity financing, and failing that a change of control, an initial public offering, or a dissolution. Nothing converts automatically on a date. When a trigger fires, the company applies the SAFE’s own terms to work out the price and the share count, issues the shares, and records them on the cap table. Until that issuance is confirmed, the SAFE is outstanding.
A SAFE round has an obvious middle: the document is signed, the wire lands, and the investor is thanked. Everyone treats that as the end. It is the beginning of a state that has no dashboard, no reminder, and often no list: the company owes stock to someone, on terms agreed a long time ago, and neither side is watching.
This is not an edge case. It is the ordinary life of a SAFE. The cost shows up in diligence, when a Series A lawyer asks for every outstanding convertible instrument and the honest answer takes a week to assemble.
A paid-for SAFE is an open promise. It stays open until a trigger occurs and shares are actually issued, which can be years, and nothing about the payment makes that promise smaller.
Standard forms convert on events, never on a calendar. The operative words are in the document you actually sent, but the shape is consistent.
Both are ways of paying less per share than the new investors in the priced round, as compensation for having gone first. They answer different questions.
Share counts, prices, and the definition of capitalization used in the calculation come from the document and from your counsel and cap table advisors. What an operations record should hold is the inputs and the outcome, not a computed opinion about either.
Someone has to state, on the record, which event happened and when. Conversion is not something that quietly becomes true.
Every SAFE, every note, every side letter, and every amendment. Terms differ between investors more often than founders expect, particularly where a most favored nation clause has been exercised.
Cap, discount, or neither, against the definitions in that document. Two SAFEs signed a month apart can convert at different prices.
Board approval, any required stockholder consent, and a charter amendment authorizing enough shares of the right class. This is where conversions actually stall.
The stock ledger or cap table entry, and a notice to the investor. The investor’s file needs the same fact from the company’s side.
The SAFE stops being outstanding on the day shares are issued, not on the day the round closed. Recording that date is what makes the next diligence question answerable in a minute.
Two open, one closed, each carrying the fact that closed it. A round file that can produce those three lines on demand is a round file that survives diligence.
This is an explanation of how a transaction works, not legal or tax advice. Termn is not a law firm, a bank, an escrow agent, or a money transmitter, and it never holds your money. What is right for your situation is a question for your own counsel, who decides it and drafts the documents that carry it.
Termn tracks each issued SAFE as outstanding in both parties’ records, indefinitely, until a trigger is declared and the share issuance is confirmed.
How Termn runs SAFE financing Your first workspace is free, and nothing goes out until you send it.
The questions come two years later, from a lawyer who was not there.
Three separate facts that most systems collapse into one green tick.
The fraud does not break anything. It waits for the right moment and sends a correction.
Signature to stock: what to decide, what to send, and what to keep. Free PDF, emailed to you.
Everything else is in the learning center.
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