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InvestmentsFunds, valuations and what the contract says

CONVERSION DISCOUNT

discount

A discount on the share price in a future funding round granted to early investors — typically between 10% and 25%.

Why it matters

Compensates for the risk taken when the company had nothing to show yet.

What's missing without it

Without a discount, early money becomes less attractive than later money at the same risk level.

When it is used

In SAFE agreements, convertible loans, and bridge rounds.

How we use it

20% discount: if the share price is $1, the early investor pays 80 cents.

Fun fact

Discount and valuation cap usually appear together, and the one that gives the investor the better outcome is applied. It’s worth checking before signing.

Numbers worth knowing

Investments in data

1.7%

Prognozowany średnioroczny wzrost (CAGR) europejskiego rynku aftermarket do 2035 roku.

BCG2024Europe

116 000 000 000 EUR

Prognozowana wartość europejskiego rynku aftermarket w 2035 roku, w porównaniu z 99 mld EUR w 2025 r. (na poziomie hurtowym, bez robocizny).

BCG2035Europe

75%

Odsetek konsumentów gotowych korzystać z agentów AI jako osobistych asystentów zakupowych.

Accenture06/2025global

Figures from the same field — collected in our market data base.

Related terms