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by Undo Capital
December 11, 2025
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What Is an ASA Discount?

An ASA discount is the reduced price at which an Advance Subscription Agreement (ASA) converts into shares during a future funding round, rewarding early investors.

ASA Discount Meaning

The ASA discount centres on compensating investors for early risk. To define ASA discount in practice, it is the percentage reduction, often 10% to 30%, applied to the share price in the next priced round when the ASA converts into equity. A clear ASA discount definition helps founders model future dilution and understand how early funding affects the cap table. For investors, the ASA discount stands for preferential pricing compared to later investors, making early participation more attractive.

Learn more about ASAs, discounts and equity planning at Undo Capital.

Disclosure Notice: This communication is issued by Undo Capital Limited (“Undo Capital”) and is provided strictly for informational purposes only. It contains general information and should not be relied upon as accounting, business, financial, investment, legal, tax, or other professional advice. Undo Capital is not regulated by the Financial Conduct Authority (FCA) and does not provide investment, financial, or tax advice. Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. Nothing in this communication constitutes, or should be construed as, a recommendation, offer, or solicitation to purchase or sell any security or financial instrument.
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Disclaimer: Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. We do not provide investment advice, financial advice, or tax advice, nor are we regulated by the Financial Conduct Authority (FCA). Participating in startups and early-stage enterprises carries inherent risks, including limited liquidity, absence of dividends, potential loss of investment, and dilution. Any decisions regarding investments should be made independently by the investor as part of a well-diversified portfolio.