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Anti-Dilution Protection

Adjustment that protects investors if the company raises a future round at a lower price.

Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

Definition

Anti-dilution provisions adjust the conversion price of preferred stock if the company issues new shares at a lower price than a prior round (a 'down round'). The most common formula is 'broad-based weighted-average,' which partially compensates earlier investors. 'Full ratchet' fully repriced and is investor-friendly but rare.

What this means in practice

MedTech down rounds are common after disappointing trial readouts or FDA delays. Anti-dilution math meaningfully redistributes ownership in those moments.

Primary references

3 sources

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On this term

Category: Investment & Finance
Sources: 3
Updated: 5/5/2026

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Learn in 60 seconds

Adjustment that protects investors if the company raises a future round at a lower price.

·MedTech down rounds are common after disappointing trial readouts or FDA delays.
·Anti-dilution math meaningfully redistributes ownership in those moments.
·The most common formula is 'broad-based weighted-average,' which partially compensates earlier investors.

Remember this

Adjustment that protects investors if the company raises a future round at a lower price.

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