Price-based antidilution protection reduces the dilutive effect on an investor of a later financing at a lower valuation (a “down-round” financing). There are two types of antidilution protection often found in angel and VC financings: full ratchet and weighted average. Tags: Financing Legal Basics MORE >>

NOTE: This is the sixth post in our series about standard terms in early stage equity financings. There are two types of price-based anti-dilution protection typically found in angel and VC financings: full ratchet (very investor favorable) and weighted average (less investor favorable). Optional Conversion and Mandatory Conversion. MORE >>

Fenwick & West LLP analyzed the terms of venture financings for 113 companies headquartered in Silicon Valley that reported raising money in the third quarter of 2011. Up rounds exceeded down rounds in 3Q11 70% to 15%, with 15% of rounds flat. MORE >>

NOTE: This is the sixth post in our series about standard terms in early stage equity financings. There are two types of price-based anti-dilution protection typically found in angel and VC financings: full ratchet (very investor favorable) and weighted average (less investor favorable). Optional Conversion and Mandatory Conversion. MORE >>

As the company grows and the second or third group of investors comes in, the terms of each subsequent financing grow in size, scope, and the number of lawyers’ fingerprints on them. Venture capitalists and later round investors like the preferred convertible shares. Remember a term sheet agreement is not a deal until the check clears. MORE >>