Glossary Term
Anti-Dilution Clause
Definition
An Anti-Dilution Clause is a contractual provision typically included in investment agreements to protect investors from equity dilution. This occurs when additional shares are issued by a company, such as during future funding rounds, at a price lower than the price paid by earlier investors. The clause ensures that the investor's ownership percentage or investment value is maintained.
Relevance to the MedTech Industry
Anti-Dilution Clauses are critical in safeguarding investor interests in MedTech startups, which often require multiple funding rounds to support lengthy product development, clinical trials, and regulatory approval processes. These clauses incentivize early-stage investments by reducing the financial risk associated with future equity dilution.
Additional Information & Related Terms
Convertible Debt Investment instruments often tied to Anti-Dilution Clauses.
Series A, B, and C Rounds Funding rounds where Anti-Dilution Clauses may come into play.
Equity Ownership interests that are directly impacted by Anti-Dilution Clauses.
Cap Table (Capitalization Table) Tracks ownership percentages, which Anti-Dilution Clauses influence.