Definition
An Anti-dilution Clause is a contractual provision that protects investors by preventing their ownership percentage from being diluted during future funding rounds.
Related Services
This clause is commonly included in venture capital agreements, private equity deals, and shareholder agreements to safeguard investor interests.
Problem and Application
The challenge lies in negotiating terms that balance investor protection with the company�s growth needs. Anti-dilution clauses ensure that early investors maintain their equity value in subsequent funding rounds.
Conclusion
Anti-dilution clauses provide critical protection for investors, ensuring fair ownership retention while fostering trust in startup investments.
