Weighted Average Anti-Dilution

Weighted Average Anti-Dilution is an investor protection tool in which a preferred shareholder’s conversion price (the price by which preferred shares are converted to common shares) is adjusted in a subsequent financing round to a lower price per share, calculated using the share price and number of shares issued in the new round. The result is that each preferred share converts into a greater number of common shares, thereby protecting the preferred shareholder from dilution.

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