Glossary / Down Round
A down round refers to a situation in which a company raises additional funding at a lower valuation than its previous funding round. This typically occurs when a company is facing financial difficulties or when its performance has not met expectations. In a down round, existing investors may experience a dilution of their ownership stake, and the company may struggle to attract new investors. Down rounds can be seen as a negative signal to the market and may indicate that the company is in a weaker position than before.