Full Ratchet
Definición
Full ratchet is the aggressive form of anti-dilution protection: in a down round, earlier investors’ conversion price resets entirely to the new lower price, regardless of how few new shares are issued.
Cómo aparece en el fundraising
Full ratchet terms shift down-round pain almost entirely onto founders and employees; standard practice is the milder broad-based weighted average instead.
Preguntas frecuentes
Should founders accept full ratchet terms?
Almost never at early stages; it is a red-flag term worth negotiating hard against, and most credible investors do not ask for it.
What is the standard alternative?
Broad-based weighted average anti-dilution, which adjusts price proportionally to the size of the down round.
Términos relacionados
Pon este término en práctica
Las definiciones solo ganan negociaciones cuando estás en una. Encuentra los inversores que financian tu etapa y empieza la conversación.
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