Rechtennieuws.nl. Term Sheet - Anti-Dilution. It has been a while since I put up a term sheet post so I thought I’d tackle a hard one today.
While it’s fun to tease lawyers about math (and – actually – about anything), my co-author on this series Jason Mendelson (a lawyer) often reminds me that lawyers can do basic arithmetic (and occasionally have to resort to algebra). The anti-dilution provision demonstrates this point. Traditionally, the anti-dilution provision is used to protect investors in the event a company issues equity at a lower valuation then in previous financing rounds. There are two varieties: weighted average anti-dilution and ratchet based anti-dilution. Standard language is as follows: Beleggen ABC. Benelux Merkenburea.