Washout Round
Definición
A washout round is a financing at a valuation so low it massively dilutes existing shareholders, often part of a recapitalization where new investors take control.
Cómo aparece en el fundraising
Washouts rescue companies out of options: prior preferences get crushed or converted, and active founders are typically re-equitized to stay motivated.
Preguntas frecuentes
How is a washout different from a down round?
Degree: a down round lowers the price; a washout resets ownership so drastically that prior stakes become nearly symbolic.
Can founders survive a washout?
Operationally yes; new money usually grants fresh equity and vesting to the team it needs, while passive early holders bear the loss.
Términos relacionados
Pon este término en práctica
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