Conversion ratio
Also called: as-converted ratio
ELI5
How many shares one security becomes.
Used in conversation
“Anti-dilution changes the conversion ratio.”
Definition
The number of common shares received for each preferred or convertible security upon conversion.
Here “Conversion ratio” means: The number of common shares received for each preferred or convertible security upon conversion.
Pitch context
You will see “Conversion ratio” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches valuation & conversion mechanics.
Why it matters: In valuation & conversion mechanics, a loose definition can change rights, obligations, approval, disclosure or enforceability.
Caution
Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.
Sources & evidence · 5
Direct term-level sources and supporting source families.
- Y Combinator — Safe financing documentsDirect source · practitioner · checked 2026-08-16
- National Venture Capital Association — Model Legal DocumentsDirect source · institutional · checked 2026-08-16
- U.S. Securities and Exchange Commission — Small Business Capital Formation GlossarySupporting source family · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Exempt OfferingsSupporting source family · primary · checked 2026-08-16
- Y Combinator — Series A Term Sheet TemplateSupporting source family · practitioner · checked 2026-08-16