# Anti-Dilution Protection

*Startups & Venture Capital — Finicade finance glossary*

Anti-dilution protection adjusts an earlier investor conversion price if a later round prices lower, shielding them from a down round.

Anti-dilution protection adjusts an earlier investor's conversion price if a later round prices lower, shielding them from a down round at everyone else's expense. Broad-based weighted average is the normal, moderate form. A full ratchet reprices their entire holding to the new low price and can transfer devastating amounts of ownership from founders and employees in a single financing.

**Also known as:** anti-dilution, ratchet, weighted average anti-dilution

**Related terms:** [Down Round](https://finicade.com/glossary/down-round), [Dilution](https://finicade.com/glossary/dilution), [Cap Table](https://finicade.com/glossary/cap-table), [Liquidation Preference](https://finicade.com/glossary/liquidation-preference), [Series A](https://finicade.com/glossary/series-a)

Source: https://finicade.com/glossary/anti-dilution-protection