Venture Down-Round Protection

Venture Down-Round Protection MCP Connector for Claude

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Model the economic impact of anti-dilution provisions during venture down-rounds.

4 tools Official Updated Oct 1, 2026 Official Vinkius Partner

This MCP server provides specialized calculation engines to model the economic shifts caused by down-rounds in venture capital. It allows AI agents to determine how anti-dilution provisions, such as Full Ratchet or Weighted Average, affect equity ownership. Users can calculate investor protection value, founder dilution, and perform conversion analysis. The server also includes logic to handle pay-to-play provisions and simulate different anti-dilution scenarios to compare outcomes. Use calculate_anti_dilution_impact to find primary shifts, apply_pay_to_play_logic to adjust for participation, and simulate_scenario_comparison to evaluate different protection types.

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4 tools expose this connector's capabilities to your AI agent.

apply_pay_to_play_logic

Modify protection outcomes based on whether investors participate in the new round

calculate_anti_dilution_impact

Determine the primary economic shifts in equity ownership caused by a down-round

get_conversion_summary

Provide a high-level comparison of ownership before and after the down-round adjustment

simulate_scenario_comparison

Compare the difference between a Full Ratchet and a Weighted Average outcome

See how to talk to your AI agent using Venture Down-Round Protection.

Calculate the impact of a $2M investment at a $10M valuation when a down-round occurs at a $5M valuation using weighted average.

The weighted average adjustment results in an increased share count for the investor, providing specific protection value while increasing founder dilution to the calculated percentage.

Compare the protection value of Full Ratchet versus Weighted Average for a $1M investment with an original valuation of $20M and a down-round valuation of $10M.

The Full Ratchet provides significantly higher protection value compared to the Weighted Average approach for this specific scenario.

What happens to an investor's protection if they do not participate in the new round?

If the investor does not participate, they lose their anti-dilution protections, which can be modeled using the pay-to-play logic tool.

Full Ratchet is an aggressive protection that adjusts the conversion price to the new round's price. Weighted Average is a moderate approach that considers both the new price and the amount of capital raised. You can use `simulate_scenario_comparison` to see the difference in protection value between them.

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