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🌍 US & Europe · Cap table & fundingAnti-dilution protection
Also called: anti-dilution, price protection
In one line
A right that protects investors from losing value if the company later raises money at a lower price, by giving them extra shares.
In plain English
If a down round happens, anti-dilution hands earlier preferred investors more shares to cushion the drop. That protection comes at the expense of common holders, who get diluted more.
If you were explaining it to a 5-year-old
A friend who bought in early has a rule: if prices fall, the club gives them extra toys to make up for it — using up toys that would have been everyone else's.
Why it matters when you sell
Anti-dilution shifts pain onto common shareholders in a down round, further reducing what your shares are worth.
Related terms
Put it to use
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Sources
A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.
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