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Convertible Note Conversion Calculator
Estimate how a convertible note converts in a priced round with interest plus a valuation cap and/or discount (simplified).
Convertible notes usually convert into equity in a priced round. The conversion price can be set by a valuation cap, a discount, or the round price, and the note may accrue interest.
This calculator estimates total note amount (principal + interest), conversion price, and resulting shares and ownership using a simplified model.
Prefer an explanation- Read the guide.
Convertible note: interest, cap/discount, and conversion basicsFundraising & valuation hub: pre/post-money, SAFEs, notes, and liquidation prefsSAFE conversion guide: cap vs discount and dilutionDCF sensitivity guide: WACC, terminal growth, valuation
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Set to 0 if the note has no cap.
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Set to 0% if the note has no discount.
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$
Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
5.17%
- Note principal
- $500,000
- Annual interest rate
- 6%
- Months outstanding
- 18
- Valuation cap (optional)
- $8,000,000
- Discount (optional)
- 20%
- Priced round pre-money valuation
- $20,000,000
- Existing fully diluted shares
- 10,000,000
- New money in priced round
- $5,000,000
How to calculate
- Enter principal, interest rate, and months outstanding to compute principal + interest.
- Enter valuation cap and/or discount (set to 0 if not applicable).
- Enter priced round pre-money valuation, existing shares, and new money to estimate ownership.
Formula
Total note = principal + interest; conversion price = min(cap price, discounted round price, round price); note shares = total / conversion price
- Uses simple interest (actual note terms may compound or accrue differently).
- Simplified priced-round model; ignores option pool changes, other instruments, and legal nuances.
- Assumes existing shares input is fully diluted and matches the priced round valuation basis.
FAQ
Does interest always convert into shares-
Often yes, but terms vary. Some notes may pay interest in cash or have specific conversion rules. Confirm the note documents.
Is cap vs discount always best of-
Many notes apply the better (lower conversion price) of cap or discount, but terms vary; confirm the conversion mechanics in your agreement.
Common mistakes
- Using the wrong interest convention (simple vs compounding; actual terms vary).
- Ignoring multiple notes/SAFEs and the option pool (dilution stacks).
- Assuming the output equals legal documentation (simplified model).
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Quick checks
- Use consistent time units (monthly vs annual) when entering rates and cash flows.
- Run a sensitivity check on the input that drives the result most (often discount rate or growth).
- Treat the output as a decision aid, not a prediction; validate assumptions with reality.