Priced round

A funding round where the share price is actually agreed, shares are issued immediately and a valuation is set.

Example

A seed round of $2M at an $8M pre-money valuation.

Important

A priced round is more expensive in legal fees and takes longer than a SAFE — and it is the moment every outstanding SAFE converts and your real ownership becomes visible.

Related terms

• SAFE — Simple Agreement for Future Equity — an investor gives money now in exchange for shares later, when a priced round happens. It is not a loan and has no interest or maturity date.
• Convertible note — A loan that converts into equity at a future priced round, usually with a discount and a valuation cap. Unlike a SAFE it carries interest and a maturity date.
• Valuation — The agreed price of the whole company, used to work out what percentage an investment buys.
• Term sheet — A short, mostly non-binding document setting out the main terms of an investment before the full legal documents are drafted.

Lessons that explain it

• SAFEs and convertible notes — How most first money is raised now — fast, cheap, and much easier to get wrong than founders expect. (15 min)

All 176 terms in the Founder glossary