The SAFE investor's shares are calculated based on the conversion price, which is determined by the valuation cap if it's lower than the priced round valuation.

In a priced round, the SAFE converts into shares based on the pre-money valuation, which includes the increased options pool.

In rare cases where the priced round valuation is lower than the SAFE cap, SAFE investors may receive a better deal, converting at the lower price of the Series A round.

The only key term to negotiate in a SAFE is the valuation, which affects how it converts and the dilution involved.

The SAFE converts into shares when the company completes an equity financing, which can be a priced round or a series round.

The only two negotiable terms in the SAFE are the investment amount and the valuation cap.

Founders need to be aware that their ownership percentage can decrease significantly due to dilution from SAFEs and new equity rounds, so they should plan accordingly for future fundraising. The percentage of ownership for SAFE investors is based on the valuation cap in the SAFE, and if the priced round valuation is higher than the cap, they convert at the cap, receiving more shares for the same investment than Series A investors.

In a merger or acquisition, a SAFE investor converts their investment into shares of common stock based on the target valuation, allowing them to participate in the proceeds of the merger.

It's uncommon for a founder to sign a SAFE with a higher valuation cap and then immediately sign another with a lower cap, as investors tend to follow market trends.