Antidilution Provision
/ˌæn.ti.dɪˈluː.ʃən prəˈvɪʒ.ən/
Definitions
- (n.) A contractual clause that protects investors from dilution of their ownership percentage by adjusting the price or number of shares if new shares are issued at a lower price.
The antidilution provision ensured early investors retained their equity stake after the new funding round.
Forms
- antidilution provisions
Related terms
See also
Commentary
Typically used in venture capital and private equity contexts; drafting should specify the type of antidilution adjustment (e.g., full ratchet or weighted average) for clarity.
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