VC Dilution & Full Ratchet Anti-Dilution Analyzer.

## The Danger of Down Rounds

In venture capital, a 'Down Round' occurs when a startup raises money at a lower valuation than their previous round. If previous investors demanded Anti-Dilution provisions (like a Full Ratchet) in their term sheet, they are retroactively compensated with extra shares to match the new, cheaper price.

### FAQ

**Q: What happens to Founders during a Full Ratchet?**
A: Founders and employees without anti-dilution protection absorb the entirety of the dilution. In extreme down-rounds, founders can lose control of the company entirely as investor share counts double or triple overnight.