Definition
A cram-down round occurs when a company raises capital at a lower valuation, diluting existing shareholders, often in distressed financial situations.
Related Services
Venture capital advisory, startup financing, and equity restructuring services help companies navigate cram-down rounds.
Problem and Application
Cram-down rounds can lead to significant shareholder dilution and investor disputes. Businesses must carefully assess alternative funding options to avoid extreme dilution.
Conclusion
While a cram-down round can provide necessary funding, it should be a last resort. Companies should explore strategic financial planning to maintain valuation stability.
