A priced round is a financing round where the company's valuation is explicitly determined, and new shares are issued at a set price, granting investors an immediate equity stake.
In a priced round, the company's valuation is established through negotiations and due diligence, resulting in a fixed price per share at which new equity is sold. This method is common in more mature startups or later-stage funding rounds, such as Series A or beyond, where there is greater clarity about the company’s value and growth prospects. Unlike convertible instruments—such as a SAFE, which defer valuation until a future financing event—a priced round provides immediate transparency regarding the ownership structure, allowing both founders and investors to understand their respective stakes from the outset. For example, during a Series A financing, a tech startup might agree on a valuation that sets the share price, with new shares issued to raise capital, thereby clearly defining the equity distribution and reducing future dilution uncertainties.
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