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How do I enter a Series Seed round into Pulley?
How do I enter a Series Seed round into Pulley?

How to convert SAFEs into Preferred stock

Michelle Chu avatar
Written by Michelle Chu
Updated over a week ago

To learn more about how to run seed rounds, read our guide here.

Congratulations on completing a seed round! πŸŽ‰

We understand completing a seed round is extensive work - updating your cap table will be the last step! Please follow the instructions below to update your cap table with the new Preferred shares and convert your SAFEs/CNs.

  1. Add the new Preferred share class(es) on the left navigation bar under Cap Table β†’ Share Classes β†’ select Add a Share Class β†’ fill out the form, then at the bottom select Save & Continue.

  2. Add the new Preferred shares on to the cap table by selecting +New (top left) β†’ Existing Contract β†’ Shares β†’ fill out the form, then at the bottom, select Save & Continue. Our system needs the Preferred shares to be added into the cap table first before converting the SAFEs/Convertible Notes.

    • Do not include the principal amount for a Preferred share that was created in connection with a converted SAFE. When you get to the Convert Notes stage, you'll be able to add in the "debt cancelled" amount which will act as the principal amount for the Preferred share. This is to prevent any double counting of the investment amount.

3. To convert your SAFEs/Convertible Notes, go to Cap Table β†’ select the SAFE or Convertible Notes tab. On the right of the screen, select the white Actions button β†’ Convert Notes.

  • Enter the closing date of the round β†’ select Confirm.

  • On the Convert Note page β†’ next to each SAFE/ Convertible Note on the left side there is a column called 'Convert to'. Select from the drop down menu attached to each security and connect to the appropriate Preferred Share you previously entered. Once all are linked, select Convert Selected Notes.

    • The Debt Cancelled column should equal the principal amount of the SAFE/Convertible Note

  • Attach all appropriate documentation directly on the recorded shares from step 2 (adding preferred shares) under the Attachments section

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