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🌍 US & Europe · Cap table & fundingDiscount (convertible)
Also called: conversion discount, SAFE discount
In one line
A percentage break that lets a SAFE or note convert into shares at a lower price than the next round's investors pay.
In plain English
As a reward for being early, a SAFE or note often converts at, say, 20% below the next round's price. It's an alternative or addition to a valuation cap.
If you were explaining it to a 5-year-old
The early friend gets a coupon: whatever the new toy price is, they pay 20% less when converting their coins into toys.
Why it matters when you sell
The discount increases how many shares early money becomes, feeding into the dilution that shapes your final ownership.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.