Convertible Note Conversion
Convert simple-interest note principal plus interest at the lower cap or discount price.
Description
A convertible note can accrue simple interest before converting at a cap or discounted round price.
A convertible note can accrue simple interest before converting at a cap or discounted round price. Interest and pricing assumptions determine the share count.
Convert simple-interest note principal plus interest at the lower cap or discount price.
When to use Convertible Note Conversion
Use this for the following task: Convert simple-interest note principal plus interest at the lower cap or discount price.
Prepare the scenario values in one currency and consistent time periods. Use fractions for fraction fields and percentage points for percent fields.
How to use Convertible Note Conversion and understand its results
- Prepare the scenario values in one currency and consistent time periods. Use fractions for fraction fields and percentage points for percent fields.
- Enter principal, annualSimpleInterest, yearsElapsed, roundSharePrice, discountFraction, valuationCap, capitalizationShares using the field table, then run the tool.
- Read accruedBalance, conversionPrice, conversionShares. Interpret flags, units, ordering and placeholder values using the rules below.
- Review any reported issue or failed check, correct the supplied values when appropriate, and verify the result in its intended context.
| Input field | Meaning | Value type and bounds | Requirement |
|---|---|---|---|
| principal | Principal | number | Required |
| annualSimpleInterest | Annual simple interest | number | Required |
| yearsElapsed | Years elapsed | number | Required |
| roundSharePrice | Round share price | number | Required |
| discountFraction | Discount fraction | number | Required |
| valuationCap | Valuation cap | number | Required |
| capitalizationShares | Capitalization shares | number | Required |
Require positive principal/prices/cap/shares, nonnegative simple rate/elapsed years and discount in [0,1). Accrue linearly and divide by the selected price.1
balance=principal(1+annualRate×years); price=min(roundPrice(1−discount),cap/shares) This summarizes the declared operation. Units, indexing, inclusivity and exceptional cases are explained in the surrounding text.
| Output field | Meaning | Value type |
|---|---|---|
| accruedBalance | Accrued balance | number |
| conversionPrice | Conversion price | number |
| conversionShares | Conversion shares | number |
{
"input": {
"principal": 1000,
"annualSimpleInterest": 0.1,
"yearsElapsed": 1,
"roundSharePrice": 2,
"discountFraction": 0.2,
"valuationCap": 1000,
"capitalizationShares": 1000
},
"output": {
"accruedBalance": 1100,
"conversionPrice": 1,
"conversionShares": 1100
}
}Limitations and assumptions
Rate is a fraction, not percent points. Compounding, fees, maturity rights and contract-specific capitalization are excluded.
These outputs describe the supplied scenario; accounting definitions, capitalization terms and time periods must match the intended use. Malformed requests produce input errors. A successfully evaluated request can still contain false flags, empty result lists or a result outside the supplied threshold; those outcomes have the meanings stated above.
Alternative or Complementary methods
Choose SAFE Cap Discount Comparison for this operation: Compare SAFE cap and discount conversion prices using supplied capitalization assumptions. For a complementary task, use Postmoney SAFE Shares for this operation: Solve one cap-only post-money SAFE share count before new-money financing dilution.
The implementation reference documents the exact calculation, supported input shapes and returned fields.
References
-
Convertible Note Conversion — tool.io
Similar or alternative tools
- SAFE Cap Discount Comparison
Compare SAFE cap and discount conversion prices using supplied capitalization assumptions.
- Postmoney SAFE Shares
Solve one cap-only post-money SAFE share count before new-money financing dilution.