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.

Related terms

Anti-Dilution Provision Full Ratchet Down Round

Go deeper

See how founders actually handle this on Raising your first round, part of the Starting Up hub.

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