Dilution 稀釋

Dilution refers to the phenomenon of a shareholder’s ownership percentage in a company decreasing because of an increase in the number of outstanding shares, leaving the shareholder with a smaller piece of the corporate pie. The total number of outstanding shares can increase for any number of reasons, such as the issuance of new shares to raise equity capital or the exercise of stock options or warrants.

稀釋指公司股東持股比例下降的現(xiàn)象，是由于流通股數(shù)量的增加導(dǎo)致股東持有公司更少的份額。流通股總數(shù)量可由于任何原因增加，例如發(fā)行新股增加股本或行使股票期權(quán)或權(quán)證。

However, not all dilutive issuances are harmful to the existing shareholders.? If the company issues shares but receives sufficient cash in exchange for the shares, the shareholders’ ownership percentages may be reduced but the value of the company has increased enough to offset the lower ownership percentage.? On the other hand, if the cash received is insufficient, the increase in the value of the company will not be enough to offset the reduction in ownership percentages.

然而，并非所有的稀釋性發(fā)行都對(duì)現(xiàn)有股東利益造成損失。若公司發(fā)行股票但因股票交易獲得足夠的現(xiàn)金，股東的所有權(quán)比例可能下降但公司的價(jià)值增加以至于抵銷(xiāo)較低的所有權(quán)比例。另一方面，若公司獲得的現(xiàn)金不足，公司價(jià)值的增加就不足以抵銷(xiāo)股東所有權(quán)比例的下降。

In venture capital deals, the transaction documents typically include negotiated provisions designed to deal with a dilutive issuance that would otherwise reduce the value of the preferred investors’ shares (relative to the price the preferred investors paid for their shares).? These provisions are referred to as “anti-dilution provisions.”

在風(fēng)險(xiǎn)投資交易中，交易文件通常包括旨在處理稀釋性發(fā)行的協(xié)商條款，否則會(huì)降低優(yōu)先股投資者股票的價(jià)值（相比較于優(yōu)先股投資者為他們股票所支付的價(jià)格而言）。這些條款統(tǒng)稱(chēng)為“反稀釋條款”。

Anti-dilution 反稀釋

In venture capital terms, dilution becomes a concern for preferred stockholders when confronted with a “down round” — a later issuance of stock at a price that is lower than the preferred issue price.? Anti-dilution provisions protect against a down round by adjusting the price at which the preferred stock converts into common stock.? We previously discussed the concept of the preferred stock being convertible into common here, noting that many of the preferences of the preferred stock are based on the number of shares of common into which the preferred converts (e.g., voting rights, dividend rights, liquidation).

在風(fēng)險(xiǎn)投資交易中，稀釋成為優(yōu)先股股東面臨“下跌”時(shí)的一個(gè)擔(dān)憂(yōu)－之后股票的發(fā)行價(jià)格低于優(yōu)先發(fā)行的價(jià)格。反稀釋條款通過(guò)調(diào)整優(yōu)先股轉(zhuǎn)換為普通股的價(jià)格從而防止下跌。我們之前討論過(guò)可轉(zhuǎn)換為普通股的優(yōu)先股的概念，指出優(yōu)先股的許多優(yōu)先選擇權(quán)是基于優(yōu)先股轉(zhuǎn)換的普通股的數(shù)量（例如表決權(quán)、股息分配權(quán)，清算等）。

There are three common alternatives for anti-dilution provisions described in the NVCA’s model term sheet: full ratchet, weighted average, and no price-based anti-dilution protection.

美國(guó)風(fēng)險(xiǎn)投資協(xié)會(huì)條款說(shuō)明模版中描述的反稀釋規(guī)定主要有三種常見(jiàn)的選擇：棘輪條款、加權(quán)平均值、無(wú)價(jià)格基礎(chǔ)的反稀釋保護(hù)。

Full Ratchet棘輪條款

A “full ratchet” provision is the simplest type of anti-dilution provision but it is the most burdensome on the common stockholders and it can have significant negative effects on later stock issuances.? Full ratchet works by simply reducing the conversion price of the existing preferred to the price at which new shares are issued in a later round. So if the preferred investor bought in at $1.00 per share and a down round later occurs in which stock is issued at $0.50 per share, the preferred investor’s conversion price will convert to $0.50 per share.? This means each preferred share now converts into 2 common shares.

棘輪條款是最簡(jiǎn)單的反稀釋條款但是對(duì)普通股股東而言是最難以負(fù)擔(dān)的，并且會(huì)對(duì)之后的股票發(fā)行產(chǎn)生重大負(fù)面影響。棘輪條款通過(guò)簡(jiǎn)單地降低現(xiàn)存優(yōu)先股的轉(zhuǎn)換價(jià)格為后一輪發(fā)行新股的價(jià)格。所有若優(yōu)先股投資者以1美元每股價(jià)格買(mǎi)入股票在之后輪的融資中股票下跌為每股0.5美元。這意味著每個(gè)優(yōu)先股現(xiàn)在轉(zhuǎn)換成兩個(gè)普通股。

Full ratchet is easy and it’s the most advantageous way to handle dilution from the preferred investor’s standpoint but it is the most risky for the holders of any common stock.? With this approach, the common stockholders bear all of the downside risk while both common and preferred share in the upside.

棘輪條款容易，最有利的優(yōu)勢(shì)是站在優(yōu)先股投資者的角度來(lái)處理稀釋問(wèn)題，但是對(duì)普通股股東風(fēng)險(xiǎn)最大。通過(guò)這種方法，普通股股東承擔(dān)所有價(jià)格下跌的風(fēng)險(xiǎn)，而普通股與優(yōu)先股同時(shí)處于上漲空間。

Full ratchet can also make later rounds more difficult.? If the company needs to issue a Series B round and the stock price has decreased, it may be difficult to get the Series A investors to participate because they are getting a full conversion price adjustment.? In essence, the Series A investors are getting more shares without putting more cash in the Series B round.? In addition, the full ratchet provision will reduce the amount the Series B investors will be willing to pay in a down round (simply because full ratchet results in more shares outstanding on an “as converted” basis).

棘輪條款也可能會(huì)使得后面的輪次更加困難。若公司需要發(fā)行B輪且股價(jià)已經(jīng)下跌，A輪投資者很難參與，因?yàn)樗麄儷@得全面的轉(zhuǎn)化價(jià)格調(diào)整。本質(zhì)上，A輪投資者無(wú)需在B輪投入更多的現(xiàn)金就能獲得更多的股票。此外，棘輪條款將減少B輪投資者在下一輪降價(jià)融資中的出資（僅僅由于棘輪條款導(dǎo)致更多流通股處于“轉(zhuǎn)換”的基礎(chǔ)上）。

Weighted Average加權(quán)平均值

A second and more gentle method for handling dilution is referred to as the “weighted average” method. [1]? Following is the calculation for a typical weighted average anti-dilution provision presented by the NVCA’s term sheet (it looks a little intimidating at first glance but it’s actually pretty simple):

第二種更溫和的處理稀釋的方式稱(chēng)為“加權(quán)平均值”方法。［1］以下是美國(guó)風(fēng)險(xiǎn)投資協(xié)會(huì)條款清單所顯示的典型的加權(quán)平均值反稀釋條款的計(jì)算（第一眼看上去有些嚇人，但實(shí)際上相當(dāng)簡(jiǎn)單）：

CP2 = CP1 * (A+B) / (A+C)

CP2? ? =? ? Conversion price immediately after new issue

CP2? ? =? 新發(fā)行后的轉(zhuǎn)化價(jià)格

CP1? ? =? ? Conversion price immediately before new issue

CP1? ? =? 新發(fā)行前的轉(zhuǎn)化價(jià)格

A? ? ? ? =? ? Number of shares of common stock deemed outstanding immediately before new issue [2]

A? ? ? ? =? 新發(fā)行前視為已發(fā)行普通股的數(shù)量［2］

B? ? ? ? =? ? Total consideration received by company with respect to new issue divided by CP1

B? ? ? ? = CP1除以公司新發(fā)行獲得的總對(duì)價(jià)

C? ? ? ? =? ? Number of new shares of stock issued

C? ? ? ? =? 已發(fā)行股份的數(shù)量

Let’s suppose a company has 1,000,000 common shares outstanding and then issues 1,000,000 shares of preferred stock in a Series A offering at a purchase price of $1.00 per share.? The Series A stock is initially convertible into common stock at a 1:1 ratio for a conversion price of $1.00.

假設(shè)一家公司已發(fā)行100萬(wàn)普通股，之后在A輪中發(fā)行價(jià)格為每股1美元的100萬(wàn)優(yōu)先股。A輪股票最初可以1:1比例轉(zhuǎn)換為普通股，轉(zhuǎn)化價(jià)格為1美元。

Next, the company conducts a Series B offering for an additional 1,000,000 new shares of stock at $0.50 per share. The new conversion price for the Series A shares will be calculated as follows:

接下來(lái)，公司在B輪中以每股0.5美元增加發(fā)行100萬(wàn)新股。A輪股票的新的轉(zhuǎn)化價(jià)格計(jì)算如下：

CP2 = $1.00 x (2,000,000 + $500,000) / (2,000,000 + 1,000,000) = $0.8333.

This means that each of the Series A investor’s Series A shares now converts into 1.2 shares of common (Series A original issue price/conversion ratio = $1.0 /$0.8333 = 1.2).

這意味著每個(gè)A輪投資者的A系列股票現(xiàn)在轉(zhuǎn)換為1.2普通股（A輪原始發(fā)行價(jià)格／轉(zhuǎn)換比例＝1美元／0.8333美元＝1.2）.

Under the discussion of full ratchet above, we noted that the preferred shares became convertible into 2 common shares post-issuance.? Under weighted average, the preferred shares became convertible into 1.2 shares.? This simple example illustrates that the weighted average approach is much less beneficial for the preferred investor but much less onerous for the common stockholders.

基于上述對(duì)棘輪條款的討論，我們注意到優(yōu)先股在發(fā)行后轉(zhuǎn)換為2個(gè)普通股。根據(jù)加權(quán)平均值，優(yōu)先股轉(zhuǎn)換為1.2個(gè)普通股。這個(gè)簡(jiǎn)單的例子說(shuō)明加權(quán)平均值對(duì)優(yōu)先股投資者的受益并不多，但讓普通股股東減輕了負(fù)擔(dān)。

However, to provide a little more context, let’s assume our hypothetical company is sold and liquidated for $10,000,000 after the Series B round.? We’ll also assume, for simplicity, that there was no dividend preference for the preferred shares and that we’re using a non-participating structure.? Here’s how the cash gets distributed with full ratchet and weighted average, respectively:

然而，為提供一些更多的背景，假設(shè)我們?cè)O(shè)想的公司在B輪融資后被出售并以1000萬(wàn)美元清算。為簡(jiǎn)單其間，我們還假設(shè)對(duì)優(yōu)先股沒(méi)有股息優(yōu)先權(quán)，我們使用非參與結(jié)構(gòu)。下表是現(xiàn)金如何通過(guò)棘輪條款和加權(quán)平均值各自實(shí)現(xiàn)分配：

棘輪條款

1000萬(wàn)美元

實(shí)際

普通

完全稀釋

清算

股票

轉(zhuǎn)換

比例

收入

普通

100萬(wàn)

100萬(wàn)

25%

250萬(wàn)

A輪

100萬(wàn)

200萬(wàn)

50%

500萬(wàn)

B輪

100萬(wàn)

100萬(wàn)

25%

250萬(wàn)

總計(jì)

300萬(wàn)

400萬(wàn)

100%

1000萬(wàn)

?

加權(quán)平均值

1000萬(wàn)美元

實(shí)際

普通

完全稀釋

清算

股票

轉(zhuǎn)換

比例

收入

普通

100萬(wàn)

100萬(wàn)

31%

312.5萬(wàn)

A輪

100萬(wàn)

120萬(wàn)

38%

375萬(wàn)

B輪

100萬(wàn)

100萬(wàn)

31%

312.5萬(wàn)

總計(jì)

300萬(wàn)

320萬(wàn)

100%

1000萬(wàn)

Note how much more the Series A investors get with full ratchet and how much this reduces the amounts distributable to Series B investors and common stockholders.

請(qǐng)注意A系列投資者通過(guò)棘輪條款得到多少，這會(huì)減少可分配給B系列投資者和普通股東的金額。

No Price-Based Anti-dilution Protection 無(wú)價(jià)格基礎(chǔ)的反稀釋保護(hù)

The third alternative for anti-dilution in the NVCA’s term sheet is no price-based anti-dilution protection.? In this scenario, the preferred investor bears the risk of a down round along with the common stockholders.? This is the fairest from the standpoint of the common stockholders but many preferred investors will not agree to take the down round risk without any anti-dilution protection.

在美國(guó)風(fēng)險(xiǎn)投資協(xié)會(huì)條款清單中第三個(gè)反稀釋的方法是無(wú)價(jià)格基礎(chǔ)的反稀釋保護(hù)。在這種情況下，優(yōu)先股股東與普通股股東共同承擔(dān)下跌的風(fēng)險(xiǎn)。從普通股股東角度而言這是最公平的方式但是許多優(yōu)先股投資者在沒(méi)有任何反稀釋保護(hù)的條件下不會(huì)同意承擔(dān)下跌的風(fēng)險(xiǎn)。