If a company becomes self-sustaining and does not raise a priced round, the SAFE does not address this situation, which can leave investors uncertain about their investment's future.

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

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.

While priced rounds are still a common method for raising funds, they typically occur later in a startup's lifecycle, often after initial fundraising through SAFEs or convertible notes.

Most companies will raise money first on SAFEs or other convertible instruments, which can complicate understanding how much of the company has been sold.

In a priced round, the SAFEs convert into shares, and the option pool is often increased to accommodate new hires, which can dilute existing shareholders.

When signing a SAFE, you might expect to own around 9% of the company based on an $800,000 investment at an $8 million cap, but this can be diluted by new money coming in during the priced round.

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.