Advance Subscription Agreement – Percentage Discount

When do I use this document?

• as an advance subscription agreement between the company and a single investor
• where the conversion price will be calculated as a percentage discount to the issue price for shares in the qualified investment round
• where there is no valuation cap

What are the key features?

• advance subscription terms and payment
• conversion on the occurrence of defined events, including a qualifying financing round, the sale of the company or on a longstop date
• conversion price on a qualified financing round to be at an agreed percentage discount to the qualified financing round share price
• warranties regarding the investor’s compliance with Financial Services and Markets Act 2000 regime regarding financial promotions

What else do I need to know?

Prior to entering into this ASA, the parties will need to consider and agree:

• discount rate: the discounted price per share (expressed as a percentage) at which the ASA investor will receive shares in the qualified financing round
• default valuation: the default valuation of the company which will be used to calculate the conversion price of the advance subscription in circumstances where conversion occurs on the agreed longstop date or the company’s insolvency
• longstop date: the longstop date on which (and in the absence of a prior qualifying financing round) the ASA will automatically convert into shares
• qualified financing round: the minimum amount of funding which the company must raise before that funding round will count as the qualified financing round under the ASA which results in the conversion of the advance subscription into shares
• subscription amount: the amount of the investor’s advance subscription

What other documents are available?

For an advance subscription agreement with an agreed valuation cap on the company, see

• Advance Subscription Agreement Valuation Cap 

For an advance subscription agreement with conversion at an agreed fixed price, see

• Advance Subscription Agreement Fixed Price

For detailed discussion regarding the purpose of advance subscription agreements and their benefits and disadvantages for investors and the company, see

• About Advance Subscription Agreements