priced round

Definition

A funding round where the company's valuation is explicitly set and shares have a specific price—as opposed to convertible instruments where everyone kicks the valuation can down the road. Forces uncomfortable conversations about what the company is actually worth.

Example Usage

After two years of SAFEs and convertible notes, they finally did a priced Series A round at a $20M pre-money valuation.

Origin

Standard equity financing terminology, distinguished from convertible instruments in the 2010s when SAFEs became popular

Fun Fact

Many Silicon Valley lawyers argue that delaying a priced round too long creates confusion and potential litigation when the notes eventually convert.

Source: Venture capital financing documentation and securities law

Related Terms

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network effects

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option pool shuffle

The practice where investors force a startup to create or expand the employee option pool before a funding round, effectively diluting founders rather than new investors. It's a clever way to pay employees with founder equity.

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hot deal

A startup fundraising round with overwhelming investor demand, usually led by a top-tier firm with multiple others fighting for allocation. The velvet rope nightclub of venture capital.

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note tsunami

The overwhelming wave of convertible notes and SAFEs that convert to equity during a priced round, often revealing a far more complex cap table than founders realized. The moment when chickens come home to roost, except the chickens are financial instruments.

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earnout

A deferred payment structure in an acquisition where sellers receive additional money only if the business hits specific milestones post-sale. It's how acquirers say 'we believe your projections!' while quietly not paying for them upfront.

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bootstrapped

Building a company with personal savings, credit cards, and stress ulcers instead of venture capital—either a badge of honor or an excuse for slow growth, depending on your exit results. It's entrepreneurship on hard mode.

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