In finance, a discount refers to the condition where the price of a bond or security is lower than its par or face value. The discount is the difference between the price paid for the security and its par value. In the context of a convertible note, the discount refers to the percentage reduction applied when calculating the conversion price of a convertible debt instrument, typically after a company completes a successful qualified financing or equity offering. A “discount” in a SAFE (Simple Agreement for Future Equity) refers to a reduced price per share that an investor receives when converting their SAFE into equity compared to the price paid by new investors in the next financing round.
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