Down Round Employee Stock 
Both Sides of the Table
JULY 29, 2010
The A round was done in February 2000 (end of the bull market) and my B round was done in April 2001 (bear market). As a result I had to do a down round. Down rounds are psychologically really difficult on companies and can make it harder to do later rounds. I eventually needed more money.
Both Sides of the Table
FEBRUARY 8, 2016
We do this in our consumer lives with everything ranging from housing purchases to public stocks. Don’t assume that you can “just do a down round” if necessary. Down rounds are corrosive. Employees hate them because it’s hard to reset expectations that their stock is worth less.
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Steve Blank
APRIL 26, 2022
They offered desperate founders more cash but insisted on new terms, rewriting all the old stock agreements that previous investors and employees had. Some even insisted that all prior preferred stock had to be converted to common stock. A cram down is different than a down round. You’re not.
www.quora.com
SEPTEMBER 22, 2011
Type to Add and Search Questions; Search Topics and People Startups Startup Compensation Entrepreneurship Compensation Stock Options Major Internet Companies Silicon Valley Why is there such a large founder to early employee equity drop-off? This answer. Please specify the necessary improvements.
Both Sides of the Table
FEBRUARY 14, 2016
Social networking finally came of age connected the planet and leading to enormous wealth creation for Facebook employees and investors. Smart phones finally took off leading to enormous wealth creation for Apple employees and investors but also helped propel Google, Facebook, Twitter, Instagram, Snapchat, WhatsApp and others.
Feld Thoughts
APRIL 21, 2016
Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. Their own ego is also a factor – will a down round signal weakness? Those are my thoughts on less than a third of Bill’s post.
A Crowded Space
MAY 31, 2016
We expect there to be an increase in down rounds, flat rounds, inside rounds and various pay-to-play scenarios. This means that unless a preferred shareholder pays in their pro-rata share of an inside round, their stock may be converted to common shares. 3) All insiders are supportive.
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