Mathematical vs. Economic Dilution of Startup Equity: Thinner Slices of an Extra-Large Pizza
Gust
APRIL 11, 2014
Let’s get right down to business: Dilution of founders’ and other early shareholders’ equity in startups is frequently a subject of intense interest and debate. Yet what matters fundamentally is economic dilution : Will adding newly issued shares make existing shares less valuable, and if so, by how much?
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