Fundraising calculator
Convertible Note Calculator
Estimate how a startup convertible note could convert in a qualified financing using explicit assumptions for principal, simple interest, discount, valuation cap, and share count.
Convertible note conversion formula used here
Conversion amount = principal + simple accrued interest. Qualified financing price = qualified financing pre-money ÷ pre-round fully diluted shares. Discount price = qualified financing price × (1 − discount). Cap price = valuation cap ÷ the same share base in this simplified model. The educational estimate converts at the lowest available of those prices.
Unlike the SAFE calculator on this site, interest increases the dollars that convert. That is why months accrued and annual rate sit next to discount and cap inputs.
Worked example: $500k principal, 6% simple interest, 18 months
Accrued interest = $500,000 × 0.06 × (18 ÷ 12) = $45,000. Conversion amount is therefore $545,000.
At a $10,000,000 qualified financing pre-money with 5,000,000 shares, qualified financing price is $2.00. A 20% discount yields $1.60. A $6,000,000 valuation cap yields $1.20. The simplified model converts at $1.20, so estimated note shares are $545,000 ÷ $1.20 ≈ 454,167 shares — more shares than the same principal would produce without interest.
What this calculator includes
- Principal and optional simple interest.
- Discount conversion price when a discount is included.
- Valuation-cap conversion price when a cap is included.
- Qualified financing price per share from a priced-round pre-money valuation and pre-round fully diluted shares.
- Estimated note shares and implied ownership before new priced-round money.
Important limitations
Actual convertible note conversion depends on the signed note and financing documents, including qualified financing thresholds, interest compounding or non-compounding treatment, capitalization definitions, option-pool handling, valuation-cap mechanics, discount mechanics, maturity provisions, and conversion order. This page uses simplified transparent math rather than pretending to reproduce every document variation.
Educational-use disclaimer: FounderMath is for educational planning only. It is not legal, tax, accounting, investment, securities, financial, or fundraising advice.
Related tools
Fundraising hub · SAFE Conversion Calculator · Valuation Cap vs Discount · Pre/Post-Money Calculator
FAQ
How does this convertible note calculator estimate conversion shares?
It adds simple interest to principal, calculates qualified financing price from pre-money valuation and shares, compares discount and valuation-cap prices when provided, then uses the lowest modeled conversion price to estimate note shares.
Is interest compounded in this model?
No. Accrued interest is modeled as simple interest: principal × annual rate × (months accrued ÷ 12). Compounding, PIK elections, and day-count conventions are document-specific and omitted here.
What if the note has only a discount or only a valuation cap?
Enter the terms that exist. The calculator compares available conversion prices against the qualified financing price and selects the lowest modeled price for the educational estimate.
Does this replace the convertible note document?
No. Conversion depends on the signed note, qualified financing definition, capitalization definition, interest treatment, maturity provisions, and conversion order. This page is educational only.
How is a convertible note different from a SAFE in this toolkit?
Notes usually accrue interest and may have maturity terms; SAFEs typically do not. Use the SAFE calculator when modeling a SAFE, and this calculator when principal-plus-interest conversion math matters.
Last reviewed September 7, 2026. See Methodology and Sources.