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

Negotiating a SAFE typically involves only two points: the amount of money the investor will contribute and the valuation cap.

If an investor wants to add terms to a SAFE to address concerns about conversion, you can negotiate that, but it adds complexity to the agreement.

Investors should model their SAFE conversions to understand the implications of multiple SAFEs with different valuations and discounts, as this can complicate ownership stakes.

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.

The capped SAFE has a target valuation, which is the highest valuation at which the SAFE will convert into shares.

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.

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