Anti-dilution provisions are the preferred-stock rights that adjust a series' conversion price downward if the company later issues stock at a lower price. They protect investors from being economically diluted by down rounds, with two main structural flavors: weighted-average (founder-friendly) and full-ratchet (punitive). It is one of the most economically significant terms in the preferred stock package, and the choice between flavors materially affects founder and common-holder outcomes when the company has to raise at a lower price.
The two structural flavors: