Business Pitch Dictionary by pitch.dog
Funding rounds & stages · Core

Down round

Also called: valuation down-round

ELI5

The new round values the company lower than before.

Used in conversation

“The down round triggers anti-dilution analysis.”

Definition

A financing completed at a lower valuation than the previous priced round.

Here “Down round” means: A financing completed at a lower valuation than the previous priced round.

Pitch context

You will see “Down round” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches funding rounds & stages.

Why it matters: In funding rounds & stages, 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.

Connected terms

  • DilutionDilution is a reduction in ownership percentage or economics; a down round is a financing at a lower valuation that may cause dilution and anti-dilution effects.
Sources & evidence · 8

Direct term-level sources and supporting source families.