Startup Investing

Dilution

Definition

What is Dilution?

A reduction in an existing holder's ownership percentage after new securities are issued.

Example in practice

A founder falls from 60% to 48% after a new financing.

Keep learning

A preliminary document outlining the main commercial terms of a proposed investment.

A company's agreed value immediately before a new investment.

A company's value immediately after adding new investment capital.

The rate at which a company spends cash, commonly measured monthly.

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