Startup Investing
Discount Rate on a Convertible
Definition
What is Discount Rate on a Convertible?
A percentage discount applied when converting an early investment into shares in a later financing.
Example in practice
How This Looks in Practice
A 20% discount lets the note convert at 80% of the next round's price.
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Related Terms
Startup Investing
Term Sheet
A preliminary document outlining the main commercial terms of a proposed investment.
Startup InvestingPre-Money Valuation
A company's agreed value immediately before a new investment.
Startup InvestingPost-Money Valuation
A company's value immediately after adding new investment capital.
Startup MetricsBurn Rate
The rate at which a company spends cash, commonly measured monthly.