Reverse Dilution is an informal term sometimes used to describe situations where an investor’s percentage ownership increases (or is protected) relative to others due to structure, such as anti-dilution adjustments, recapitalizations, or conversion mechanics that shift shares toward one class. In cap table dynamics, Reverse Dilution effects can occur in down rounds with aggressive anti-dilution provisions, and Reverse Dilution outcomes are often contentious because they can disproportionately impact founders, employees, and smaller investors.
