Business Pitch Dictionary by pitch.dog
Valuation & conversion mechanics · Working

Pre-money cap

Also called: pre-money valuation cap

ELI5

An older cap whose final ownership depends on later instruments.

Used in conversation

“The pre-money cap does not fix the investor's percentage.”

Definition

A valuation cap used in a pre-money convertible framework.

Here “Pre-money cap” means: A valuation cap used in a pre-money convertible framework.

Pitch context

You will see “Pre-money cap” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches valuation & conversion mechanics.

Why it matters: In valuation & conversion mechanics, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Sources & evidence · 5

Direct term-level sources and supporting source families.