Valuation cap
Also: Cap
The maximum valuation at which a SAFE or note converts, protecting early investors if you raise the next round high.
A lower cap means early backers get more equity for their money — it's the most negotiated number on a SAFE.
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SAFE
A simple instrument that converts into shares at your next priced round, usually with a cap and/or discount.
Convertible note
A loan that converts into equity at a later round — like a SAFE but with interest and a maturity date.
Discount
A percentage break early SAFE/note holders get on the next round's price as a reward for backing you sooner.
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