16 ms·

New to term sheet... Can I ask what does discount mean in this context... "$4MM cap at 25% discount"

• throwawayuc 13y ago
  It means if another future investor makes an investment where the pre-money valuation of the company is LESS THAN $4MM (like, $350K for 10%), then the initial investor's shares would convert at 1.25x the rate of the new money coming in. So new investor would get 10% for $350K while past investor's convertible note would convert to 12.5%.