Investors should ensure their rights under a SAFE are respected during conversion rounds, particularly regarding pro-rata rights, as ignoring these rights breaches the contract.

Pro-rata rights allow investors to maintain their percentage ownership in future funding rounds.

Investors should check their rights and the cap table during conversion to ensure their SAFEs are converted correctly and that they retain their pro-rata rights.

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

The SAFE (Simple Agreement for Future Equity) allows investors to convert their investment into equity at a later date, but the exact ownership percentage isn't known until the priced round occurs.

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.

Investors should exercise their pro-rata rights to maintain their ownership percentage during subsequent funding rounds, as early investors can face significant dilution otherwise.

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.