Full Ratchet

Full Ratchet is an anti-dilution protection that adjusts an investor’s conversion price to match the lowest price at which new shares are issued in a later down round, regardless of the number of shares sold. Because Full Ratchet can significantly dilute founders and other shareholders, Full Ratchet provisions are considered highly investor-favorable and are often negotiated heavily.

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Ryan Roberts Startup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.