Anti-dilution provisions
A) are always bad for entrepreneurs even in an up round
B) always protects the new investor and bad for both entrepreneurs and early investors
C) protects entrepreneurs in a down round but has no effect in an up round
D) protects early investors in a down round but has no effect in an up round
E) protects the new investor in a down round but has no effect in an up round

Question

Quizplus · Accepted Answer

Anti-dilution provisions are designed to protect early investors in the event of a down round, where the company issues shares at a lower valuation than in previous rounds. They do not have an effect in an up round, where the company's valuation has increased.

Anti-Dilution Provisions