Weighted Average Anti-Dilution
The standard, fairer form of anti-dilution: a down round adjusts earlier investors' conversion price based on both the new price and how many new shares were issued, not the new price alone.
Why it matters
Broad-based weighted average is what most founders should accept, since it shares the pain of a down round proportionally rather than punishing them. Knowing it is the norm gives you a clear line in negotiation.
For example
In a down round, a broad-based weighted-average clause nudges an early investor's conversion price down modestly, based on both the new price and how many shares were issued.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Raising your first round, part of the Starting Up hub.
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