# What is Anti-Dilution Provision? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Funding  
> **Canonical Citation:** [https://spidits.com/startup-glossary/anti-dilution-provision](https://spidits.com/startup-glossary/anti-dilution-provision)

## Definition
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.

## Architectural Mechanics & 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).

## Industry Applications & Real-World Use Cases
Investor rights protection in down rounds

## Frequently Asked Questions

### What are the main types of anti-dilution?
Broad-Based Weighted Average (standard, moderate) and Full Ratchet (extreme, dilutes founders heavily).

### How does anti-dilution trigger?
During a down round, it adjusts the conversion price of preferred shares, granting the investor additional shares.

## Related Terminology
- [dilution](https://spidits.com/startup-glossary/dilution)
- [down-round](https://spidits.com/startup-glossary/down-round)
- [term-sheet](https://spidits.com/startup-glossary/term-sheet)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*