Anti-Dilution

Definitions

1. A protective term that adjusts an investor's ownership economics if later shares are sold at a lower valuation, reducing the impact of dilution from a down round. The exact mechanics vary by formula and can materially affect cap table outcomes.

   In plain English: A term that protects investors if later fundraising happens at a lower valuation.

   Example: "The founders accepted anti-dilution protection but negotiated hard on the exact formula."

Related Terms

• Vesting
• Cap Table
• Dilution
• Cliff
• Cap Table
• Liquidation Preference
• Participation Rights
• Preferred Stock