- May 6, 2020
- Knowledge Repository
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Anti-Dilution
Explaination:
Anti-dilution terms are required in order to protect Investors from the dilution of equity when shares are issued at a later date and at cheaper prices than when those investors had originally paid.
How it applies to Startup/Investor and its impact:
An anti-dilution provision is essential in order to shield an investor from the possibility of their equity holdings becoming diluted over time. They are a form of subscription rights or privileges for investors.
Further details on types of Anti-Dilution available here – https://yourstory.com/2016/01/anti-dilution