Valuation Cap
Also called Cap
The maximum company valuation at which an early investor's SAFE or note converts into shares. It rewards them for backing you early by giving them a better price if you go on to raise at a much higher number.
Why it matters
The cap is the most negotiated term in an early round because it quietly sets how much of the company that money buys. A low cap raises now can cost you a painful chunk of ownership later.
Related terms
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