A Price Cap is a maximum price used in certain financing instruments (such as a SAFE or convertible note valuation cap) to set the effective conversion price, ensuring early investors receive a minimum amount of equity if the next priced round is at a high valuation. In seed financings, a Price Cap aligns risk and reward for early capital, and the Price Cap is a central negotiation point that functions similarly to a capped pre-money valuation.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
