Conversion Price
Definition
The price per share at which a SAFE or convertible note converts to equity at the triggering event. The conversion price is determined by the valuation cap, the discount rate, or both, as specified in the instrument terms. Where both a valuation cap and a discount rate apply, the conversion price is the lower of the two calculated prices, resulting in the investor receiving more shares.
Common Misapplication
The most common misapplication is calculating only the cap-based conversion price when an instrument carries both a cap and a discount. Where the round price implies a discount-based price lower than the cap-based price, the instrument converts at the discount price. Modeling only the cap-based price understates dilution.
FFI Standard Reference
This term is defined and applied in Book 3, Section 3.2: The SAFE and Convertible Instrument Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Conversion Price. https://ffistandard.org/glossary/conversion-price/. 2026.