priced equity round

Definition

A funding round where the company valuation is explicitly set and shares are sold at a specific price per share, unlike convertible instruments that defer pricing. It's the grown-up version of fundraising, with actual valuations and everything.

Example Usage

We graduated from SAFEs to a priced equity round, which meant spending $50K on lawyers to document our $2M raise.

Origin

Standard venture capital terminology distinguishing traditional equity rounds from newer instruments like SAFEs and convertible notes.

Fun Fact

Priced rounds require significantly more legal work and negotiation than convertible instruments, which is why SAFEs became popular for early-stage deals.

Source: Venture capital financing structures

Related Terms

Intermediate

up-stack

Moving to build or sell products at higher layers of technology infrastructure, typically where margins are better and you're further from commoditized infrastructure. The opposite of down-stack, and usually more profitable.

🚀 Startup / VC

Advanced

carried interest

The VC's cut of investment profits, typically 20% of gains above a certain return threshold. How general partners get rich while limited partners provide the actual money—the ultimate performance fee.

🚀 Startup / VC

Intermediate

extension round

Additional capital raised on the same terms as the previous round (like a Series A-1) rather than progressing to the next stage, buying time without the stigma of a flat or down round. The startup equivalent of taking an incomplete rather than failing the course.

🚀 Startup / VC

Beginner

Seed Round

The first significant round of funding, where investors plant money in your startup like seeds in a garden, fully expecting that most gardens will produce nothing but weeds and regret. It's typically between $500K and $5M, which is a lot of money for a PowerPoint presentation.

🚀 Startup / VC

Intermediate

valuation cap

The maximum valuation at which a convertible note or SAFE will convert to equity—a safety net for early investors betting on you when you were nobody. The lower the cap, the more expensive your desperation was.

🚀 Startup / VC

Advanced

preferred return

The minimum annual return (typically 8%) that limited partners receive before general partners can claim carried interest, functioning as a hurdle rate to ensure LPs get paid first. Think of it as making the GP eat their vegetables before getting dessert.

🚀 Startup / VC

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