A down round is a funding round at a lower valuation than the last one. It dilutes earlier investors and founders.
What the film says
In venture capital, a startup can raise new money at a lower price. It's called a down round. Say a startup was valued at five hundred million. Now it raises new money at three hundred and fifty. So why do investors care? Earlier investors and founders get diluted. And it often triggers protections written into earlier deals. New money came in. The old price didn't hold.
In the glossary: Down round
A simple example with round numbers, not advice. Terms vary by fund.
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