Anti-Dilution Protection (Weighted Average vs Full Ratchet) Calculator
How do Broad-Based Weighted Average and Full Ratchet anti-dilution clauses re-price investor conversion shares during a down round?
Financial Inputs
The specific anti-dilution formula specified in the Shareholders Agreement (SHA).
Adjusted Conversion Share Price
Following a down-round drop from ₹100 to ₹60 per share, the broad-based clause resets the protected investor conversion price to ₹92.
Additional Compensatory Shares Issued
17,391
New Preferred Conversion Ratio
1.09x
Key Financial Takeaways
- Following a down-round drop from ₹100 to ₹60 per share, the broad-based clause resets the protected investor conversion price to ₹92.
- The protected investor conversion ratio increases to 1.087:1, awarding 17,391 additional compensatory shares.
- Protected investor ownership is preserved at 17.2%, imposing a 1.4% extra equity dilution penalty on common founders.
Frequently Asked Questions
Why is Full Ratchet anti-dilution so dangerous for startup founders?
Full Ratchet completely ignores the size of the down round. Even if a startup raises a tiny ₹10 Lakh check at a lower valuation, all previous multi-crore investments are re-priced down to that price. This results in massive compensatory share issuances that can completely wipe out founder equity.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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