Priced equity rounds
A priced round sets a valuation today. Investors buy newly issued preferred shares at an agreed price per share. It is the cleanest outcome — and the slowest and most expensive to paper.
Deferred-price instruments
SAFEs and convertible notes postpone the valuation question to a future priced round. They convert using a valuation cap, a discount, or both. Notes add interest and a maturity date; SAFEs usually do not.
Venture debt and revenue-based finance
Debt does not dilute directly, but it carries covenants, warrants, and repayment obligations that can constrain a company at exactly the wrong moment.
Choosing
Speed and low cost favour SAFEs. Governance clarity and large cheques favour a priced round. Most companies use deferred instruments early and priced rounds from Series A onward.
Key takeaways
- Priced rounds set a valuation; SAFEs and notes defer it
- Instrument choice affects speed, cost, and cap-table complexity