Funding
Equity Dilution
Definition
The reduction in existing shareholders' ownership percentage when new shares are issued — whether to investors, employees (ESOP), or for any other reason. Your percentage goes down, but the absolute value may go up.
Why founders care
Dilution is inevitable and not inherently bad. A smaller slice of a bigger pie is worth more. Typical seed dilution: 10–25%. Series A: 15–25%. Always negotiate on valuation, not just percentage.
Related terms
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