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This means that the maximum valuation of the company following the IPO has been reduced by $10bn to around $26bn.
They will then "extract maximum valuation with utter disregard of not only the content industry, but also consumers, civil society and lakhs of millions of entrepreneurs in this particular space".
The business secretary said the claim by stockbroker Panmure Gordon that Royal Mail is worth £4.5bn compared with the government's maximum valuation of £3.3bn was "way outside the estimates of most of the equity analysts".
A capped note means there is a maximum valuation at which the note will convert.
"We want to get maximum valuation with minimal dilution," aCommerce Group CEO Paul Srivorakul told TechCrunch in an interview.
In these cases, angels provide loans to startups that are then converted into equity in the next investment round, often at an agreed upon maximum valuation and/or a discount on that valuation for the angels who support the convertible note.
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In computing the maximum deductible, valuation accounts such as the allowance for loan losses cannot be considered.
The soaring share price, which values Royal Mail at £4.7bn compared with the government's maximum £3.3bn valuation, has fuelled accusations that the government sold off the 500-year-old company too cheaply.
A few seasoned entrepreneurs have approached us recently with a clearly defined valuation maximum.
These preferences were in conflict without broad consensus on how to balance criteria such as maximum benefit, social valuation, moral deservingness, prejudice, fair innings, first come, first served, and medical urgency.
To study how the market for takeovers operates, it is critical to understand how different potential acquirers shape their valuations, or maximum willingness to pay, for targets.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com