FAQS
What are down rounds, up rounds and flat rounds?
- Financing
- Preferred Stock
You may hear that a financing is an “up round”, “down round” or a “flat round”. This terminology is associated with Companies that have already raised one or more equity rounds and are now raising more money. An “up-round” means the valuation of the Company is higher than it was at the last financing round; a “flat round” means the valuation is the same as the last round; and a “down round” means the valuation is lower than the last round.
While flat and down rounds have been less common during the venture capital boom of the past few years, they have become more common recently as the economy slows. Check out our latest quarterly Entrepreneurs Report for a breakdown of recent trends related to down rounds and other venture capital terms.
The answer provided is for general informational purposes only, does not constitute legal advice, and may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome. For more information, see the site’s Terms of Use.