A contractual clause protects an investor from having their investment as a percentage of ownership significantly reduced in subsequent fundraising rounds. Technically the provision increases the number of shares of Common Stock issuable upon conversion of convertible security or upon exercise of a warrant or option upon the occurrence of specified events, usually the issuance of more shares for a low price.
A contractual clause protects an investor from having their investment as a percentage of ownership significantly reduced in subsequent fundraising rounds. Technically the provision increases the number of shares of Common Stock issuable upon conversion of convertible security or upon exercise of a warrant or option upon the occurrence of specified events, usually the issuance of more shares for a low price.
