A down round is a funding round where the company is valued lower than in its previous round. Down rounds trigger anti-dilution provisions for previous investors, resulting in additional dilution for founders and employees. They are a negative signal to the market and can impact employee morale when stock options become underwater (exercise price exceeds current value).
Triggers anti-dilution provisions, significantly diluting founders and employees. Negative signal to market.
Market corrections, missed milestones, or over-optimistic prior valuations. More common in tough funding environments.
Not modeling anti-dilution impact; employee morale issues with underwater options; reputation damage.
Looking for investors?
Browse 950+ European investors filtered by stage, sector, country, and check size.
Explore the investor directory