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Q

What are anti-dilution rights?

A

At a high level, shares that have anti-dilution rights provide protection to investors in the event that the company raises additional financing at a lower valuation than in a previous financing. Most, but not all, equity financings led by venture capital investors have anti-dilution rights for the preferred stock investors. For more reading, see Brad Feld’s post “Term Sheet - Anti-Dilution"

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