Anti-Dilution Protection Calculator
Model Full Ratchet vs Weighted Average anti-dilution and see exactly how a down round changes conversion price and shareholding for the protected investor.
Deal Inputs
Enter numbers → Get instant impactSide-by-Side Comparison
| Metric | Full Ratchet | Weighted Average | Difference |
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Step-by-Step Calculation (using your numbers)
Formula Reference
Full Ratchet
Conversion price is reset directly to the new (lower) issue price. No weighting is applied. The size of the new round and existing capitalisation are ignored.
Adjusted CP = New Issue Price
Adjusted Shares = Original Investment Amount ÷ Adjusted CP
Broad-based Weighted Average
The new conversion price is a weighted blend that considers both the size of the new round and the pre-existing capitalisation. This produces a milder adjustment than Full Ratchet.
B = New Round Amount ÷ Original CP
C = New Round Amount ÷ New Issue Price
Adjusted CP = Original CP × (A + B) ÷ (A + C)
Adjusted Shares = Original Investment Amount ÷ Adjusted CP
A = fully-diluted shares outstanding before the new issuance
Key points when reviewing an anti-dilution clause
What actually triggers protection? Not every issuance below the previous price. Check excluded issuances carefully.
Common carve-outs ESOP grants within an approved pool, bonus issues / stock splits, securities under existing convertibles, strategic issuances approved by investors, shares issued as consideration in an acquisition.
Full Ratchet vs Weighted Average Full Ratchet is the strongest form and shifts almost all dilution to unprotected shareholders. Weighted Average is the market-standard compromise.
Broad-based vs Narrow-based Broad-based includes options, warrants and convertibles in the denominator (more founder-friendly). Narrow-based excludes them (more investor-friendly).
Disclaimer: This calculator is an educational and illustrative tool only. It does not constitute legal, tax, accounting or investment advice. Actual anti-dilution mechanics depend entirely on the specific language of the Shareholders’ Agreement / Share Subscription Agreement, including definitions of “Fully Diluted”, excluded issuances, treatment of multiple series, and any pay-to-play provisions. Always review the definitive agreements and, where needed, obtain independent professional advice.
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