A term used by Y Combinator that describes short “open source” documents that have been drafted for use in early-stage private company financing deals.
“Discount shares” is a term sometimes used to describe the shares issued upon conversion of a convertible note or SAFE in respect of the portion attributable to the discount rate/conversion price discount.
A conversion price cap is the maximum valuation at which convertible debt or SAFEs convert at the time of the financing resulting in the conversion, regardless of the valuation agreed to by the company and the new equity investors.
A convertible note is an investment vehicle often used to facilitate investing in a company without establishing a valuation. Convertible notes are loans that generally later convert into equity.