What is Anti-Dilution Provision?
Anti-Dilution Provision
An Anti-Dilution Provision is a contract clause that protects early investors from dilution if the startup issues shares at a lower valuation in subsequent rounds.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding Anti-Dilution Provision helps founders model equity distributions when structuring rounds for investor rights protection in down rounds.
Detailed Deep Dive
An Anti-Dilution Provision is a contract clause that protects early investors from dilution if the startup issues shares at a lower valuation in subsequent rounds (down rounds).
Frequently Asked Questions
Q:What are the main types of anti-dilution?
Broad-Based Weighted Average (standard, moderate) and Full Ratchet (extreme, dilutes founders heavily).
Q:How does anti-dilution trigger?
During a down round, it adjusts the conversion price of preferred shares, granting the investor additional shares.
Quick Facts
- CategoryFunding
- Key ApplicationInvestor rights protection in down rounds
Coverage Trend12 Weeks
Related Startup Terms
Cite This Term
Reference this definition in your articles, research, or documentation to credit this source:
Anti-Dilution Provision Media Coverage & Intelligence
No Direct Anti-Dilution Provision News Today
We currently have no direct coverage articles matching "Anti-Dilution Provision". Explore trending global startup topics below instead.
Trending Startup Stories
How to bring your software delivery workflow into GitHub with agent apps
See how four GitHub agent apps can help you scope, secure, roll out, and ship a feature across the SDLC-all without leaving GitHub. The post How to bring...
Universitas Gadjah Mada, Indosat and NVIDIA Open Indonesia's First University AI Center to Develop Local AI Talent
Indonesia is taking charge of its AI future. This week, the Ministry of Communication and Digital Affairs (Komdigi), Indosat Ooredoo Hutchison (Indosat or...
How Cloudflare detects MCP traffic and helps secure it
Cloudflare Gateway identifies MCP requests using protocol-level heuristics. Security teams can use that signal to find shadow MCP traffic, enforce...
Building agentic workflows with SageMaker AI and Bedrock AgentCore
Learn how to combine OpenAI-compatible endpoints on Amazon SageMaker AI with Amazon Bedrock AgentCore runtime to build a multi-agent workflow where each...