Up Round Versus Down Round

This question tests whether you understand how companies are valued across successive financing rounds and how investors describe those changes. In equity financing interviews, candidates are often expected to know the role of pre-money valuation, how a new round is compared with the prior round, and why the terminology depends on valuation movement rather than the amount of cash raised. Interviewers ask this because it checks both basic capital markets vocabulary and your ability to think carefully about how financing terms affect ownership and investor economics.