Wash-Out Round
Definition of 'Wash-Out Round'A common round of financing to owners of small companies that are not yet financially stable. When such financing is done, the new issuance serves to dilute drastically the ownership of previous investors and owners. Often, the new investors are able to take control of the company because the previous owners are in desperate need of more financing to avoid bankruptcy.Also know as "burn-out round" or "cram-down round". |
|
Investopedia explains 'Wash-Out Round'The wash-out round is often the final financing opportunity available to entrepreneurs before a company is forced into bankruptcy. Wash-out rounds often occur when companies are unable to achieve performance levels that have been set in order to receive additional financing from investors.Wash-outs occurred during the dotcom craze of the late 1990s when many companies were significantly overvalued. |
Related Definitions
Articles Of Interest
-
Using Enterprise Value To Compare Companies
Learn how enterprise value can help investors compare companies with different capital structures. -
Will Corporate Debt Drag Your Stock Down?
Borrowed funds can mean a leg up for companies, or the boot for investors. Find out how to tell the difference. -
IPO Basics Tutorial
What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop. -
How Line of Credit Works
A line of credit is an arrangement where a bank offers a maximum loan amount that the borrower can draw upon at any time. The borrower – which can be an individual, business or government ... -
7 Unconventional Ways Businesses Can Borrow Money
Find out how your business can get the money it needs - even when the bank says "no". -
Should You Head Back To Business School?
Find out if an MBA is necessary for you to reach your professional goals. -
Business Grads, Land Your Dream Job
Companies are in need of strategic candidates, not walking resumes. Find out how to set yourself apart from the pack and land the business career you've always wanted. -
Women And Finances: Is There A Gender Bias?
Uncover some very complex reasons for female gender biases in the finance world. -
Female Entrepreneurs Are Surpassing Their Male Counterparts
The world of entrepreneurship is constantly changing; the last year has seen a significant shift in the performance of female entrepreneurs. -
Implementing A Small Business Social Media Strategy
As social media continues to change the way people communicate, it has become an increasingly important tool for small businesses.
Free Annual Reports