Check the terms: it becomes debit or prorated shares
Let's say a simple LLC business has two standard post-money SAFEs....
- Investor A contributed $40,000 at a post-money valuation cap of $400,000
- Investor B contributed $50,000 at a post-money valuation cap of $800,000
- There are no other investors
Questions: If the business is fully sold for $600,000 all cash, does Investor B still receive 6.25% of the acquisition cash even if the sale is under their valuation cap?