How to Track Anti-Dilution on Preferred Stock

How to track anti-dilution is a shadow-cap ledger after you already own preferred, when a later down round or cheap issuance may adjust Conversion Price. It is not Raziel's liquidation preference tracking page (seniority, multiple, remaining preference) and not a primer on what prefs are. The National Venture Capital Association (NVCA) October 2025 Model Certificate of Incorporation prints two Section 4.4.4 alternatives, broad-based weighted average versus full ratchet. The forms are fill-ins.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the signed certificate of incorporation, not a platform default.

Copy these columns from the charter

Open one row per series you hold, per issuer. NVCA's model-documents page: the forms present potential options and are a starting point only. Carta (May 8, 2026): anti-dilution protects investors if the company later raises a down round at a lower valuation. Pulley (February 9, 2026): the investor's shares convert into more common.

• Issuer and series. Legal name and the series printed on the stock.

• Original Conversion Price. NVCA COI 4.1.1: each share converts into Common equal to Original Issue Price divided by Conversion Price then in effect. Initial Conversion Price is a dollar fill-in (insert original purchase price of that series), subject to Section 4.

• Formula. Broad-based weighted average, full ratchet, or none. NVCA labels two 4.4.4 instructions. Carta support lists a third type, narrow-based weighted average (excludes options, warrants, and sometimes other non-preferred shares). If your COI has no 4.4.4, log none.

• Excluded issuances. NVCA Exempted Securities do not move Conversion Price. Copy the list, including any bracketed caps that survived.

• Last adjustment date. Date Conversion Price last moved. NVCA 4.9: the Corporation furnishes a certificate not later than ten days after each adjustment.

• New as-converted shares. Preferred shares you still hold times Original Issue Price divided by Conversion Price then in effect. NVCA 4.1.2: nearest whole share after aggregating fractional interests in that series (0.5 or greater rounds up). Cite the certificate. Attach the PDF.

Raziel's shadow cap table template covers authorized, issued, pool, and fully diluted %. This page is the Conversion Price row under your shares.

Broad-based weighted average versus full ratchet

NVCA first 4.4.4 block: if after the Original Issue Date the Corporation issues Additional Shares of Common Stock (including deemed issuances under 4.4.3) without consideration or for a consideration per share less than the Conversion Price then in effect, Conversion Price for that series is reduced concurrently with the issue. Formula walk with blanks, not invented share counts:

CP2 = CP1 * (A + B) / (A + C)

CP2 is Conversion Price immediately after. CP1 is Conversion Price immediately prior. A is Common outstanding immediately prior, treating as outstanding all Common issuable upon exercise of Options then outstanding and upon conversion or exchange of Convertible Securities (including the Preferred Stock) then outstanding. B is aggregate consideration received divided by CP1. C is the number of Additional Shares issued in the transaction. NVCA 2020 Term Sheet uses the same identity.

NVCA second 4.4.4 block: Conversion Price is reduced, concurrently with the issuance, to the consideration per share received for the Additional Shares. If the issuance was without consideration, the Corporation is deemed to have received an aggregate of [$0.001] of consideration for all such Additional Shares.

Carta's priced-round page labels broad-based weighted average "market-standard." That is Carta's label. Pulley: full ratchet adjusts conversion price to the new lower price; weighted average is proportional to size and price. Do not treat those labels as a rule that your series used broad-based weighted average. NVCA 4.4.2: no adjustment if [the Requisite Holders] [holders of [a majority] of that series] send written notice agreeing none shall be made. Log the waiver.

Which issuances are excluded

Trigger language is Additional Shares of Common Stock, not every new share. NVCA: Additional Shares means all Common issued or deemed issued after the Original Issue Date other than Exempted Securities. Printed exemptions include a dividend or distribution on that series of Preferred; splits, dividends, and reorganizations under Sections 4.5 through 4.8; employee, director, or advisor plan shares approved prior to the Original Issue Date or by the Requisite Directors; Common issued on exercise or conversion pursuant to existing terms; and Common issued in a firm underwritten public offering. Bracketed exemptions, only if your COI kept them, include banks or lessors, suppliers, acquisition consideration, and sponsored research or similar strategic agreements.

Carta (February 6, 2023): a down round is a financing whose pre-money valuation is lower than the prior round's post-money valuation. Cheap issuances that are not a round can still be Additional Shares if they are not Exempted Securities. Options and Convertible Securities can be deemed issued as Additional Shares when granted (NVCA 4.4.3). If an unexercised Option later expires, Conversion Price is readjusted as if that Option had never been issued. Related closings [within [180] days] are readjusted on the final issuance as if they all occurred on the first date.

Update as-converted shares after an adjustment

As-converted Common equals shares of that series you still hold times (Original Issue Price divided by Conversion Price then in effect). After CP2 is computed, rewrite the as-converted cell. File the NVCA 4.9 certificate next to the row. If the company never sent one, keep last adjustment date blank and keep CP1. Do not invent a CP2 from a deck price.

A workbook holds this if each series is a row, the formula matches the 4.4.4 block actually used, Exempted Securities are copied not assumed, and as-converted shares move only when Conversion Price moves. It fails when you paste broad-based weighted average as a default, skip a cheap issuance that is not exempt, or treat liquidation preference as the same ledger. Raziel's startup investment tracker is the book those preferred rows already sit on: cash dates, documents, cap tables, IRR and MOIC. Raziel does not interpret your charter. Copy the columns. Leave the conversion math to the COI you already signed.