Anti-dilution provisions are used to protect investors from being diluted in the event a startup raises a down round. Anti-dilution provisions ensure that investors receive a conversion adjustment based on the lower price of the stock issued in a future down round. There are different types of anti-dilution provisions, including broad-based weighted average, narrow-based weighted average, and full ratchet.
Related Posts
-
Post Categories
- Startups
Common and Preferred Stock: What's the Difference?
Common stock does not sound exciting. Preferred stock does. First-time founders are looking for excitement—especially when it comes to their millions of initial shares—and so they’re often surprised to hear that they’ll be receiving common, rather than preferred stock when the startup is incorporated.
-
Post Categories
- Startups
- Fundraising
The Ultimate Guide to Raising a Priced Round for Startups
Discover essential strategies for raising a priced round in our guide for startups. Learn how to avoid common pitfalls and secure the funding your company needs to scale.
