Plain-language glossary
Valuation cap
A valuation cap sets the maximum company valuation used to convert an early investment into equity, giving early investors a better price if the next round is priced higher.
For startup investors
Where this term changes your decision
Use this term to identify the instrument, economics, rights, or regulatory route in the actual documents. Do not infer current availability or suitability from a definition alone.
Reviewed August 24, 2026 · Educational information