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
From Training to Production, NVIDIA and CoreWeave Close the Loop on Agentic AI
Building on nearly a decade of co-engineering, CoreWeave has built NVIDIA compute, networking and software into a cloud purpose-built for AI that's still...
NVIDIA Opens Applications for 2027-2028 Graduate Fellowships With Awards Up to $60,000
Bringing together the world's brightest minds and the latest accelerated computing technology leads to powerful breakthroughs that help tackle some of the...