A Cram-Down Round Is an Investment Round Where Follow-On Investors

question 30

True/False

A cram-down round is an investment round where follow-on investors are compelled by favorable conditions to accept a higher valuation than they would prefer.

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Definitions:

Sales Mix

The proportion of different products or services that make up the total sales of a company.

Unit Contribution Margin

The amount each unit sold contributes to covering fixed costs and generating profit, calculated by subtracting variable costs per unit from the selling price per unit.

Break-Even Point

The financial point at which total revenues equal total costs and expenses, resulting in no net loss or gain.

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.