A “Soft Cap” is a term that is used to refer to the absolute minimum amount of funds that must be raised during a fundraising event such as an ICO (initial-coin-offering) or STO. Whenever a Softcap is reached the project is considered to be funded enough to begin operations.
Cryptocurrency project SuperMegaCrypto is launching and they need funding. They need $1,000,000 for a full year of operations & they need 9 months to produce a product. They decide to hold a fundraising event where they request $5,000,000 and claim that there will be a Softcap of $950,000. Once the softcap is reached, they are allowed to being building.