The priced round

In a priced roundEquity & financingPriced roundA financing in which investors buy a new series of preferred stock at a stated price per share, on a negotiated pre-money valuation — as opposed to a SAFE or note, which defers the price. Converting SAFEs and notes convert at its close investors buy a new series of preferred stockEquity & financingPreferred stockA class or series of stock with rights common lacks, set out in the charter — usually a liquidation preference, conversion into common, anti-dilution protection, protective provisions and board seats. What investors buy in a priced round, and what a SAFE converts into — Series Seed, Series A — at a price per share set by the pre-money valuationEquity & financingPre-money valuationWhat a company is priced at immediately before new money comes in. Pre-money ÷ pre-money fully diluted shares is the round's price per share — so whatever the term sheet puts in the pre-money (converting SAFEs, a bigger option pool) is paid for by the existing holders, on a term sheetEquity & financingTerm sheetThe short summary of a priced round's economics and control terms — price, pre-money, pool, liquidation preference, anti-dilution, board, protective provisions, pro rata — that the definitive documents then implement that the definitive documents implement. Most US venture rounds are papered on the NVCA's model documents: a certificate of incorporation, a stock purchase agreement, an investors' rights agreement, a voting agreement and a right of first refusal and co-sale agreement.