Anti-dilution, Weighted average

Anti-dilution provisions that apply a weighted average formula to the option price or conversion ratio of an early -round investor, based on the sales price and number of common equivalent shares sold by the company after the issuing of the option or convertible security. As an example, if a first round of financing raised € 1 million capital at € 2.00 per share and the first round investors received weighted average anti-dilution protection, and a second round of financing was consummated for an other 1 € million at 1 € per share, then the first round of investors would have the right to convert their shares at a weighted average adjusted price of € 1,50 per share.