What is the discount? Convertible

  1. Decide how much money you need to achieve your first milestone
  2. Predict the post-money valuation for your pre-seed round
  3. Determine the investment you need to achieve your second milestone
  4. Forecast the post-money valuation for your seed round
  5. Set the convertible investor’s interest rate
  6. Estimate after how many months you get to your first milestone

Rule: equity investor’s equity stake after seed round = convertible investor’s equity stake after seed round.