“We need protection against dilution if you engage in future down rounds,” said venture capitalists 3 years ago, not really believing that they would need to call upon this protection.
Rough Justice or Fair Cop? The Reality of Anti-dilution Provisions
We need protection against dilution if you engage in future down rounds," said venture capitalists 3 years ago, not really believing that they would need to call upon this protection. However, the unexpected and significant decline in valuations for companies over recent years has focused the attention of VCs and VC-backed companies on anti-dilution provisions. In today's investment climate, VCs are not only more selective with their potential investments, but are also demanding more favorable financial and control provisions in term sheets. In particular, protection against downside risk is of much more significant importance.
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Struan PenwardenThis premium content is locked for LawJournalNewsletters subscribers only
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