Anti-Dilution (Investor’s Right Protection) – hu consultancy

Today’s uncertain economic environment, coupled with the tightening of available capital from venture capital funds, has marked the return of a dangerous price protection device: “full ratchet” anti-dilution. This device, generally included in the terms of preferred stock issued to new investors, seeks to protect those investors from being diluted by a subsequent financing at a lower valuation — the so-called “down round” — by causing an adjustment to the applicable conversion rate for the preferred stock. For more details call us at (020) 2442 – 0209 or visit


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