An entrepreneur has 1000 shares of the venture. An early investor invested $10,000 for 2000 shares that included a full ratchet provision (5 per share ) now in a subsequent round, an investor is wiling to invest $8,000 for a 40% share of the ending equity The premoney value at the time of this round is $12,000. Based on the information above, this is a “down round.” If there had been no ratchet provision, the new investor would need 2000 shares to achieve a 40% interest, and the share price would be $4. With the ratchet, the post money share price would be $2 and the new investor would need 4,000 shares. The early investor would get 3,000 additional shares to make up for the down round. True, false, uncertain.