Conversions of convertible instruments and how fully diluted shares are counted are separate concepts.
SAFEs and Convertible Notes generally are almost never converted into common shares during a priced round. If this is being contemplated, then it is very likely that the priced round (aka preferred stock financing, at least in the US) is a "down round" or a "recap" - whereby the portfolio company is raising money at less than desirable terms just to survive.
As for the "how", these conversions are baked into the priced round's financing agreements, and involve complex calculations that are typically done by lead counsel on a spreadsheet generally referred as the "pro forma". You can find examples of the agreements here (https://nvca.org/model-legal-documents/), but please note that the conversions and documents are custom for each deal, depending on the negotiated terms, investors involved, state of the cap table, etc.
Counting fully diluted shares is simply a way of understanding a company's cap table - it's typically used in calculating the "pro forma" mentioned above. Yes - most of the time preferred shares count on a 1:1 basis when discussing the company's cap table on a fully diluted basis, but this is also something that can vary depending on the company's legal agreements.
A typical conversion ratio does not apply to either of the above.
SAFEs and Convertible Notes generally are almost never converted into common shares during a priced round. If this is being contemplated, then it is very likely that the priced round (aka preferred stock financing, at least in the US) is a "down round" or a "recap" - whereby the portfolio company is raising money at less than desirable terms just to survive.
As for the "how", these conversions are baked into the priced round's financing agreements, and involve complex calculations that are typically done by lead counsel on a spreadsheet generally referred as the "pro forma". You can find examples of the agreements here (https://nvca.org/model-legal-documents/), but please note that the conversions and documents are custom for each deal, depending on the negotiated terms, investors involved, state of the cap table, etc.
Counting fully diluted shares is simply a way of understanding a company's cap table - it's typically used in calculating the "pro forma" mentioned above. Yes - most of the time preferred shares count on a 1:1 basis when discussing the company's cap table on a fully diluted basis, but this is also something that can vary depending on the company's legal agreements.
A typical conversion ratio does not apply to either of the above.
