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By J.D. Houvener
Patent Attorney and Founder

A long way of going about it what i’m trying to say is the valuation cap essentially gives the investors an even bigger price break than the discount rate and when you’re negotiating with investors you will find that one terms that they are going to be that’s going to be header shaded is going to be that valuation cap because when the save converts it converts at the price it either converts at the discount or the valuation cap not both it’s going to convert at the one which gives the investor the the bigger bang for their buck and nine times out of ten that’s going to be the valuation cap they’re going to get more of a discount with it converting at the valuation cap so to those entrepreneurs and startups out there who are thinking about raising a safe round or who may be in the middle of raising a safe round right now it’s important to note that dynamic when it comes to the valuation cap you’re going to want it set as high as possible within reason right you can’t just throw out a random number there it has to be backed up you have to do your research and see what other companies have raised that are in your industry et cetera et cetera because you know if you just throw out a random number there i’m on it as high as possible within a reasonable range whereas the investors want it as low as possible

About the Author
J.D. Houvener is a Registered USPTO Patent Attorney who has a strong interest in helping entrepreneurs and businesses thrive. J.D. leverages his technical background in engineering and experience in the aerospace industry to provide businesses with a unique perspective on their patent needs. He works with clients who are serious about investing in their intellectual assets and provides counsel on how to capitalize their patents in the market. If you have any questions regarding this article or patents in general, consider contacting J.D. at