Cram Down

April 28, 2015 by FundingSage -

AKA. Burn Out – Extraordinary dilution, by reason of a round of financing, of a non-participating investor’s percentage ownership in the issuer.³

Related Terms

Collar Agreement | Closed-end Fund | Non-Dilutive Shares

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Definitioner

Dilution

Issuing more shares of a company dilutes the value of holdings of existing shareholders.² A reduction in the percentage ownership of a given shareholder in a company caused by the issuance of new shares.³

Issuer

A company raising funds through a "Portal" or "Broker-Dealer" via securities-based crowdfunding, and issuing a security (equity or debt) to each investor in return for his or her funds.¹
Refers to the organization issuing or proposing to issue a security.³

Burn Out

AKA. Cram Down - Extraordinary dilution, by reason of a round of financing, of a non-participating investor’s percentage ownership in the issuer.³

Related Terms Dilution Protection | Post-Money Cap Table | Pre-Money Cap Table Related Articles The Holy Grail of Entrepreneurship: Part 3 - The Capitalization Table Dilution: The Real Meaning of Funding Success