Valuation Cap
정의
A valuation cap is the maximum company valuation at which a SAFE or note converts, guaranteeing early investors a minimum ownership regardless of how high the priced round lands.
투자유치 시 활용 방법
$100K on a $5M post-money cap converts to at least 2 percent even if the Series A prices the company at $20M.
자주 묻는 질문
Is the cap the same as my valuation?
No; it is a conversion ceiling, not an appraisal, though investors read caps as market signals when deciding to engage.
How do I choose a cap?
Anchor on what comparable companies at your traction level are capping, and budget total SAFE dilution to 15 to 20 percent before the priced round.