Down round

Down round

Refers to a round of venture capital financing that is raised at a lower firm valuation than the previous round.

Down Round

In venture capital, a round of financing in which a company issues more stock with less valuation than previous financing rounds. This devalues all other stock in the company and results in less equity per share. A down round is usually a response to a major or minor cash flow problem, and ideally result in immediate cash on hand to cover operating costs. When the dotcom bubble burst, many tech companies held down rounds as an emergency measure to stay in business. See also: Antidilution provision.