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Discount Shares

Glossary Term

“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.

Dollars-Invested Method

Glossary Term

Dollars-invested method is one of three typical methods by which the price per share of the new preferred stock is determined. The price per share of the new preferred stock is calculated by dividing the agreed-upon pre-money valuation by the fully-diluted shares outstanding at the closing, excluding only the shares of new preferred stock to be sold for cash at the closing.

Convertible Note

Glossary Term

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.

Bridge financing

Glossary Term

A bridge financing is a financing intended to provide a startup with the necessary capital to get to a subsequent funding round or sale transaction.