Glossary

Glossary

Term Book Chapter Definition
Valuation Cap Angel Investing: Convertible Notes Chapter 9: Convertible Notes vs. Other Debt Instruments A term used in SAFE notes and convertible notes. SAFE notes typically do not have a valuation cap, meaning the conversion price is always based on the price per share at the time of conversion. Convertible notes usually have a valuation cap.
Valuation Cap Venture Finance Chapter 8: Debt Financing In the context of convertible notes, it refers to a benefit for the early investor that limits the maximum price they pay for equity during the conversion of the note into equity.