A "valuation cap" entitles note holders to convert the outstanding balance on the note into shares of stock at the lower of (i) the valuation cap or (ii) the price per share in a qualified financing (or, if there …

Feb 24, 2025 · Also known as a conversion cap, a valuation cap is designed to set the threshold for the convertible note so that an investor can own a larger stake of your company. It can help convince …

Dec 1, 2025 · A valuation cap is a contractual agreement stipulating the maximum company valuation used to calculate an early investor’s conversion price. This ceiling protects investors from excessive …

Apr 9, 2025 · A valuation cap is a maximum value that can be placed on a company during a funding round. This value is determined by the investors and is typically based on the company's current …

Jan 14, 2025 · Valuation cap: Sets a maximum conversion price, regardless of the actual company's value. The formula for this is: Investor's ownership = investment amount valuation cap. Discount: …

What Is a Valuation Cap? A valuation or conversion cap is put on the price at which convertible notes or SAFEs will convert to equity in the future (if we're dealing with convertible notes).

Jul 31, 2025 · A valuation cap is a maximum value ascribed to the company, and it therefore dictates the highest price per share (PPS) that a Convertible Security holder will pay for shares when the …