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🌍 US & Europe · Cap table & fundingValuation cap
Also called: cap, SAFE cap
In one line
A ceiling on the valuation at which a SAFE or convertible note converts into shares, rewarding early backers.
In plain English
A cap guarantees early investors a maximum price, so if the next round values the company higher, they still convert at the lower capped value — getting more shares for their money.
If you were explaining it to a 5-year-old
An early friend is promised: 'no matter how pricey toys get, you convert your coins as if toys still cost the old low price.'
Why it matters when you sell
Caps determine how many shares SAFEs and notes become, affecting the final share count your ownership is measured against.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.