A type of anti-dilution protection for preferred stock in the event of a down round of series financing that adjusts the number of common shares the preferred shares can be converted into based on the new share price.
Provisions in a company’s certificate of incorporation that increase the number of shares of common stock into which preferred stock when the company sells stock at a lower price.
Dilution is a reduction in the ownership percentage of a share of stock caused by the issuance of new stock.
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