I want to invest €200k in this pre-seed startup. Using a convertible with a cap. What is the cap?

Your pre-money cap should be €800k.

Ready to calculate your convertible’s cap?

  1. Get the Excel. It’s free
  2. Forecast the startup’s enterprise value at the time you want to exit
  3. Decide on your portfolio multiple
  4. Estimate the probability of a successful exit
  5. Predict your dilution till exit
  6. Establish how much money the startup needs to achieve its first milestone

To simplify, ignore the interest on the convertible.

And assume the convertible uses the percentage-ownership conversion method.