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Down Round

Raising money at a lower valuation than your previous round. Painful for existing shareholders, but often better than running out of cash.

Example

A company valued at ₹50Cr raising at ₹30Cr two years later has done a down round.

Related terms

Bridge Round
A smaller, quick raise to give you more runway to reach the next big milestone. A "down round" is a raise at a lower valuation than before.
Valuation
How much your company is judged to be worth. 'Pre-money' is the value before new investment; 'post-money' is pre-money plus the money raised.
Dilution
When new shares are issued (to investors or employees), each existing owner's percentage of the company shrinks — even though the company is usually worth more overall.

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