Hard Cap
The maximum amount of capital an issuer will accept in a securities offering.
Full Definition
A hard cap is the maximum funding limit for a securities offering. Once this amount is reached, the offering closes and no additional investments are accepted. The hard cap represents the total amount the issuer is willing to raise in exchange for the equity, debt, or other securities being offered.
Unlike the soft cap (minimum threshold), the hard cap defines the upper boundary of the raise. Issuers set this based on their capital needs, dilution tolerance, and offering structure.
Why It Matters
On Sails.to, hard caps ensure that offerings close automatically when fully subscribed, preventing over-allocation. For investors, the hard cap helps assess the total capital being raised and calculate potential dilution or participation in bond pools.
For bonds, the hard cap often determines the total nominal value of the issuance. For equity offerings, it defines the maximum dilution the issuer will accept.
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