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Dictionary by pitch.dog
Term-sheet economics · Core

Anti-dilution protection

Also called: price-based anti-dilution

ELI5

Investor conversion terms may improve after a cheaper round.

Used in conversation

“The down round triggers anti-dilution protection.”

Definition

A mechanism adjusting preferred conversion terms after certain lower-priced issuances.

Here “Anti-dilution protection” means: A mechanism adjusting preferred conversion terms after certain lower-priced issuances.

Pitch context

You will see “Anti-dilution protection” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches term-sheet economics.

Why it matters: In term-sheet economics, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

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Sources & evidence · 5

Direct term-level sources and supporting source families.