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Conversion Rights

Conversion Rights

  • Term

    Main definition

  • Conversion Rights

    Rights under which shares of preferred stock (or other convertible securities) may be "converted" into (and become) shares of common stock.

    Conversion can be automatic or mandatory (in certain specified events, such as a qualified sale, qualified IPO, satisfaction of financial performance targets, and/or approval by a specified vote of preferred stock holders) or voluntary (i. e., at. the option of the holder). Conversion rights are typically accompanied by anti-dilution provisions.

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