Discounted Convertible Note

A loan that converts into the same equity security being purchased in a future investment round, but at a discounted price representing a risk premium for early investment.⁷

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Investment Round

A set of one or more investments made in a particular company by one or more investors on essentially similar terms at essentially the same time.⁷

Equity

Ownership in the capital of a Company. In corporations, it is called “stock”; in limited partnerships or LLCs, it is called “interests” or “units.”³
This designation is given to a stockholder’s ownership in a company. The amount of ownership is obtained when an individual or corporation purchases one or more shares of stock (equity shares). The more equity purchased, the greater the ownership.⁴

Risk

The probability that part or all of an original investment will be lost or that investment returns will be lower than anticipated. Numerous factors may impact these potential investment and return losses, including but not limited to demand risk, economic risk, environmental risk, funding risk, legislative risk, maintenance risk, operational risk, procurement risk, technology risk and timing risk.⁶

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