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    Priced Round

    An equity financing in which the company and investors agree on a per-share price and issue preferred stock, as opposed to a convertible note or SAFE.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed September 19, 2026

    Definition

    A priced round is an equity financing in which the parties negotiate a fixed pre-money valuation, divide it by the fully diluted share count to derive a per-share price, and issue a new series of preferred stock at that price. This contrasts with convertible instruments (convertible notes, SAFEs) that defer valuation to a later priced round. Priced rounds typically involve a term sheet, a stock purchase agreement, an investors' rights agreement, a voting agreement, and a right of first refusal and co-sale agreement, largely following the NVCA model document set. For a MedTech company, a priced round often follows the accumulation of enough clinical, regulatory, or reimbursement evidence (a completed pivotal study, a 510(k) clearance, or an initial CPT code) to support a defensible valuation, whereas earlier bridge financing before those inflection points is frequently done on convertible notes or SAFEs to avoid pricing the company prematurely.

    What this means in practice

    MedTech financing timelines are long relative to software, so companies frequently raise several convertible bridges between priced rounds to fund milestone-based work (a first-in-human study, a pivotal trial, an FDA submission) without repeatedly resetting valuation. The Series A priced round is often the first true price-setting event, and its terms (liquidation preference, anti-dilution, board seats, protective provisions) set precedent for every subsequent series.

    Examples

    • A company agrees to a $28,000,000 pre-money valuation with 20,000,000 fully diluted shares outstanding before the round. Price per share = $28,000,000 / 20,000,000 = $1.40. An investor putting in $7,000,000 receives $7,000,000 / $1.40 = 5,000,000 new shares, and post-money valuation becomes $28,000,000 + $7,000,000 = $35,000,000.
    • Before a Series B priced round, the company has two outstanding convertible notes with a $6,000,000 valuation cap and a $9,000,000 cap. If the priced round sets a $40,000,000 pre-money valuation, both notes convert at their respective caps (the lower of cap price or round price), diluting new investors' effective ownership relative to the headline price.
    Common pitfalls
    • •Assuming pre-money valuation is fixed before knowing the fully diluted share count; option pool top-ups negotiated 'inside' the pre-money valuation dilute founders more than the headline number suggests.
    • •Treating a priced round's valuation as directly comparable to a prior convertible note's valuation cap without adjusting for the option pool shuffle and any accrued but unconverted notes.
    • •Failing to update the cap table for outstanding convertible instruments before calculating price per share, which produces an incorrect post-closing ownership picture for all parties.

    Frequently asked questions

    Valuation is hard to defend before there is objective clinical or regulatory evidence. Many MedTech companies use convertible notes or SAFEs to bridge between milestones (first-in-human data, a regulatory clearance, initial reimbursement coverage) and only price the round once that evidence exists.

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    Every citation below opens the original document. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.

    Tier 1Binding law and standards· 1Tier 2Regulator guidance and consensus· 1Tier 4Trade press and expert commentary· 1
    Link health: 1 verified 2 unchecked· last checked 2026-06-20
    SEC Investor.gov·1NVCA·1Cornell Law LII·1
    1. 1
      SEC Investor.gov: Venture Capital
      Tier 2 Unchecked
      SEC Investor.govinvestor.gov
    2. 2
      NVCA Model Legal Documents
      Tier 4 Verified
      NVCAnvca.org
    3. 3
      Cornell LII: Preferred Stock
      Tier 1 Unchecked
      Cornell Law LIIlaw.cornell.edu

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