Frequently asked questions
What does "uncapped valuation" mean?
Uncapped valuation means there’s no limit on the value at which a convertible note will turn into equity.
What is the difference between uncapped and capped SAFE?
The difference between uncapped and capped SAFE (Simple Agreement for Future Equity) is that a capped SAFE has a maximum valuation for conversion into equity, protecting early investors from excessive dilution, while an uncapped SAFE does not.
What does "no valuation cap" mean?
"No valuation cap" means there’s no limit on the valuation for a convertible note to turn into equity, which can dilute early investors more if the company’s value rises significantly.