Down Round
Private Equity glossary · Private Equity Fundamentals
Definition
Equity financing at a share price below the previous round.
Down Round in plain English
A down round is when a company raises new money by selling shares at a lower price per share than it charged in its previous fundraising — a sign the market now thinks the company is worth less than before. It matters because it stings existing owners: their stake gets diluted more cheaply, and it can signal to the world that things aren't going as well as hoped. Imagine reselling concert tickets you bought for $100 each, but now the most anyone will pay is $60 — you can still raise cash, just at a painful markdown that admits the value dropped.
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