Convertible Note Conversion Calculator

About this calculator

A convertible note is startup debt that converts into equity at a future priced funding round rather than being repaid in cash. Two terms typically protect the early investor: a valuation cap (a ceiling on the company valuation used to price their shares, however high the new round prices) and a discount rate (a percentage off the new round's price per share). This calculator computes the effective conversion price under both mechanisms and takes whichever gives the investor more shares — the "better of" outcome — then multiplies by the note's principal (plus any accrued interest) to get the share count.

Startup founders, angel investors, and startup lawyers use this calculation when a priced Series A or later round closes and outstanding notes need to convert, since getting the cap-versus-discount comparison right directly determines how much of the company early investors end up owning and how much the founders' stake gets diluted.