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Dictionary by pitch.dog
Term-sheet economics · Specialist

Narrow-based weighted average

Also called: narrow-based WA

ELI5

A stronger adjustment because fewer shares count in the formula.

Used in conversation

“The founders rejected narrow-based weighted average.”

Definition

A weighted-average anti-dilution formula using a narrower denominator, usually producing a stronger adjustment.

Here “Narrow-based weighted average” means: A weighted-average anti-dilution formula using a narrower denominator, usually producing a stronger adjustment.

Pitch context

You will see “Narrow-based weighted average” 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.