Cram-Down

• Term

  Main definition

• Cram-Down

  A funding round in which new investors (usually bringing substantial capital into the company and/or as part of a down round) demand and receive new preferred securities and contractual provisions that significantly reduce (or dilute) the ownership percentage (and rights and protections) of previous investors.

  Usually, as a result of a cram-down round, the new investors gain majority and controlling ownership of the company. See also Wash-Out Round.