with broad-based weighted average, the formula provides some compensation to earlier investors for having involved themselves in a project that for whatever reason failed to maintain value, let alone build value.

Company value with new money = Shares post financing at new price * new price= shares calculated as if new money were invested at old price * old price;

Therefore:
New price= old price * (outstanding shares + new money/old price) / shares post financing at new price

Do you agree?

I would appreciate your thoughts on something that has always bugged me about this.

Given that any subsequent rounds of equity financing will demand to come in as senior to the existing preferred, and that the existing preferred will uniformly have veto rights over the creation of any senior class of preferred, why are all of these elaborate anti-dilution provisions necessary? Would the venture world be any different if all these anti-dilution provisions went away and the preferrreds simply retained their veto over the creation of any senior classes? Another way of asking this question: have you ever seen these provisions actually triggered?

Thanks for your very informative site.