A percentage off the next round's per-share price that a SAFE or convertible note holder receives when their investment converts to equity, typically 10% to 25%.
TransferWise (now Wise) raised its earliest 2011-2012 capital on convertibles with the standard 20% discount, before IA Ventures led the Series A. The math: if the Series A priced at £0.50 a share, the convertible holders converted at £0.40, capturing a fifth more equity for the same money. By Wise's 2021 direct listing at an £8B valuation, that 20% had compounded into a meaningful share of the cap table.