How to Track Full Ratchet Anti-Dilution After Close

How to track full ratchet anti-dilution is the overlay you keep after a down round when the charter you signed actually uses full ratchet, not a weighted-average formula. Raziel's anti-dilution tracking page covers both NVCA Section 4.4.4 alternatives. Raziel's down-round tracking page is the closed-round row. This page is four conversion cells on the series that reset: old Conversion Price, new issue price, new Conversion Price, and extra as-converted shares.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the signed certificate of incorporation, the stock purchase agreement, and the post-close cap table. NVCA's model-documents page: the forms present potential options and are a starting point only.

Confirm the 4.4.4 block is full ratchet

The NVCA October 2025 Model Certificate of Incorporation prints two labeled Section 4.4.4 instructions, one for broad-based weighted average and one for full ratchet. Copy the block in the filed COI for the series you hold. If the signed charter is weighted average, this overlay does not apply. Log the type as weighted and keep the reset cells blank. If the COI has no 4.4.4, log none.

Cooley GO (last reviewed May 10, 2021): full ratchet divides the original price of the preferred purchased by the current share price and "does not take into account the amount of financing raised in a down round, only the price per share." Cooley GO also states that full ratchet "is far less common in US venture financing deals than broad-based weighted-average anti-dilution protection." That is Cooley's label. Do not treat it as a rule that this series used weighted average. Carta support: full-ratchet "sets the conversion price to the lowest price offered in the new round, significantly increasing conversion ratios even if few new shares are issued." Unlike pro-rata rights, anti-dilution increases the conversion ratio so each share converts into more common. If your COI is narrow-based, it is not this overlay.

Eight columns after the triggering round

Open one row per series you still hold, per issuer, after the triggering round closes. Do not overwrite the prior Conversion Price row. Copy each field from the closing pack. If a field is missing, store that it was missing.

• Series. Issuer legal name and the series printed on the stock you still hold.

• Anti-dilution type copied (full ratchet versus weighted average). The 4.4.4 block in the charter you signed, not a platform default. NVCA 4.4.2: a written waiver from [the Requisite Holders] [holders of [a majority] of that series] means none for this overlay.

• Old Conversion Price. Conversion Price immediately prior (NVCA CP1). NVCA 4.1.1: initial Conversion Price is a dollar fill-in (insert original purchase price of that series). Date it from before this close.

• New round price. SPA consideration per share for the Additional Shares. Cooley GO: a down round sells capital stock at a price per share less than an earlier financing. Copy the SPA dollar, not a deck valuation.

• New Conversion Price. NVCA full ratchet 4.4.4: reduced, concurrently with the issuance, to that consideration per share. If without consideration, the Corporation is deemed to have received an aggregate of [$0.001] of consideration for all such Additional Shares. Copy the fill-in in your COI.

• Extra as-converted shares. New as-converted Common minus as-converted Common immediately before the reset. NVCA 4.1.1: 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 (0.5 or greater rounds up). Cite the 4.9 certificate. Do not invent a share count.

• Excluded issuances, if any. NVCA Exempted Securities do not move Conversion Price. Copy the list, including any bracketed caps that survived. If this round is exempt, there is no reset.

• Date of the triggering round. Close date on the SPA or the amended certificate. NVCA 4.9: the Corporation furnishes a certificate not later than ten days after each adjustment. File that PDF.

The reset is the new issue price, not a blended formula

NVCA's full ratchet 4.4.4 block does not use A, B, or C. Conversion Price moves to the consideration per share received for the Additional Shares, concurrently with the issue, including Additional Shares deemed issued under 4.4.3. The weighted-average walk, CP2 = CP1 * (A + B) / (A + C), lives on Raziel's anti-dilution tracking page. Do not paste that formula onto a full-ratchet series. NVCA 4.4.1: Additional Shares means all Common issued or deemed issued after the Original Issue Date other than Exempted Securities. Cheap issuances that are not a round can still trigger if they are not exempt. Cooley GO: the adjustment increases how many common shares each preferred share converts into. It is not extra preferred, which would raise liquidation preference. If the company never sent a 4.9 certificate, keep new Conversion Price blank. Do not invent a reset from a deck price.

When the overlay holds

The row holds if type is full ratchet as copied, old Conversion Price is CP1, new round price is the SPA dollar, new Conversion Price equals that consideration per share (or the deemed no-consideration amount if the COI uses it), extra as-converted shares equal new minus old, exclusions are copied, and the date is the triggering close. It fails when you paste the weighted-average formula onto a full-ratchet series, skip Exempted Securities, or log extra preferred. 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 eight columns.