A percentage reduction on the priced-round share price that early SAFE or note holders receive at conversion. Plain-language explainer with examples.
A percentage reduction on the priced-round share price that early SAFE or note holders receive at conversion.
A discount rewards early investors for taking risk before the priced round. Common discounts are 10–25%. If a priced round sets shares at $1.00 and the SAFE has a 20% discount, the SAFE converts at $0.80/share.
Most SAFEs use either a cap or a discount, or both — in which case the SAFE holder gets whichever gives them more shares.
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