Anti-Dilution Provision
A protection for investors that adjusts their ownership if the company later raises money at a lower valuation than they originally invested at.
Quick Answer
What's the difference between full-ratchet and weighted-average anti-dilution?
Full-ratchet resets the investor's conversion price to match the new, lower round price entirely — very founder-unfriendly. Weighted-average adjusts the price proportionally based on the size of the new round, a far more common and balanced approach.
- Full-ratchet is rare and heavily favors the investor
- Weighted-average is the market-standard middle ground
- This clause only activates in a down round, not a flat or up round
The Lovie Advantage
Lovie recalculates the exact anti-dilution adjustment against your real cap table the moment a down round is modeled.
See how this connects to Drag-Along Rights. For the formal definition, see Investor.gov's glossary entry on insider trading.
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