(USA) Anti-dilution provisions that apply the lowest sale price for any shares of common stock (or equivalents) sold by the company after the issuing of an option or convertible security with anti-dilution protection as the adjusted option price or conversion ratio. As an example, if a prior round of financing raised capital at $2.00 per share with investors receiving full ratchet anti-dilution protection, and a subsequent round of financing was completed at $1.00 per share, the prior round investors would have the right to convert their shares at the $1.00 price, thereby doubling the number of shares they would receive. See 'Anti-dilution Provisions' and 'Anti-dilution, Weighted Average'. In the UK, 'ratchet' is customarily associated with a mechanism whereby the equity share of a management team may vary depending on achievement of milestones or level of exit valuation. See 'Ratchet'.