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Dilution concerns by founders and investors

Taffy Williams

Investors and co-workers in your startup often express dilution concerns. This piece further addresses the issue of dilution as a result of an excellent question from a reader commenting on a recent article covering the summary of a conference.

Dilution and Investment - An Answer You May Not Expect

Taffy Williams

The companies with low prices either had to dilute investors in a financing, had enough to survive, or went out of business. So when you consider the Dilution Effects of a financing, remember the following advice delivered by many old timers; “ It is Better to Have 10% of a Lot of Money, than Have 100% of Nothing.” You don’t want to dilute the investors too much, but you want enough funds to ensure you can weather any storm and that you will not run out of money.

Avoiding sticker shock from service providers

Taffy Williams

This can cause dilution that may be more acceptable than spending the cash. The investors may want a discount from the negotiated price to deal with the dilution. Basically, any dilution causes a reduction in your holding percentage and you take a haircut too. Other articles are in the Charlotte, NC- small business section of Examiner.com. Few companies will operate with employees as the sole source of workers for your company.

Are You Involved or Committed in a Startup?

Taffy Williams

They may have other interests that can dilute their attention to the company. Things that take your attention away only dilute your efforts in the company. Other articles can be found in the Charlotte, NC- small business section of Examiner.com. Entrepreneurs in startup companies may spend years working before the company becomes financially stable or a reasonable exit turns up.

Your best customers sometimes kill your company

Taffy Williams

Spreading risk does dilute the potential for reward, but it protects the downside as well. Other articles are in the Charlotte, NC- small business section of Examiner.com. Sorry I must say "Good Bye and I Am Leaving "!

Dialing for Dollars

Taffy Williams

One greatway to get non-dilutive financing is by partnering a product you may not wishto develop or sell yourself. Other articles can be found in the Charlotte, NC- small business section of Examiner.com. As statedbefore, your startup will have little or no money for the first severalmonths. The most important activitiesyou can do in this time are to create as much value to make the companyfundable. Chicken or Egg” is the bestanalogy one can provide to the situation you will face.

Startup Blog: Got Money or Need Money? Doesn't Matter. Focus.

Taffy Williams

The feeling is that all must be developed and this can lead to dilution of resources and slow advancement of your best products. Other articles can be found in the Charlotte, NC- small business section of Examiner.com. Startup Blog Steps to consider to start and grow a company.