Priced rounds

A priced round is when the company sells newly issued shares at a negotiated price. Unlike a SAFE or convertible note, which postpone the valuation fight, a priced round settles it now: how much the company is worth, how many shares the investor gets, and what rights those shares carry.

The economics look simple — money in, ownership out — but the details that decide dilution live one layer down: preferred vs common, pre-money vs post-money, and whether the employee option pool is carved out before or after the new money lands.

post-money valuation = pre-money valuation + new investment
investor ownership   = new investment / post-money valuation

$8M at $32M pre → $40M post → 20% for the new money, before the pool's extra bite. A larger required pool is a stealth valuation cut; model it in the shuffle.

Concepts in this section

Step	Concept	What it answers
1	Preferred vs common	Why VCs buy a different class than employees hold.
2	Pre-money and post-money	How ownership and price per share are defined.
3	Walking a priced Series A	The $8M / $32M / 10% pool arithmetic in full.
4	Closing a priced round	Which documents, multiple closings, and what to ask.

As a founder, never sign a term sheet without a pro forma cap table that shows (1) SAFE/note conversion, (2) pool top-up, (3) new investor ownership, and (4) founder ownership post-close. As an engineer, ask last preferred price, current 409A, pool size and leftover, and whether preferred is 1× non-participating.

Common mistakes

Negotiating pre-money while ignoring the pool.
Forgetting SAFE conversion in the denominator.
Announcing ownership before modeling.
Multiple closings without a full pro forma.

Key takeaways

Priced rounds sell preferred stock at a set price; ownership = investment / post-money.
Price per share = pre-money / fully diluted pre-money shares, including the new pool when the term sheet says so.
The option pool shuffle puts pool dilution on existing holders.
Closing means charter + SPA + rights agreements; model the full round.
Always build the cap table both from ownership targets and from share math.