Anti-dilution
A protective provision for investors that adjusts their equity ownership percentage in the event of a future funding round at a lower valuation, ensuring their stake is not reduced unfairly. Anti-dilution provisions can come in various forms, such as full ratchet or weighted average adjustments.
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This glossary provides an overview of some key legal terms for startups. It's essential to consult with a legal professional to ensure a comprehensive understanding of these terms and their implications for your specific situation.
