For private companies, fundraising decisions are critical to facilitating growth. To make an informed decision, however, it’s important to understand the long-term implications of equity dilution.
What Is Equity Dilution?
Equity dilution is defined as the decrease in equity ownership for existing shareholders that occurs when a company issues new shares. Typically, a founder starts out owning 100% of a company and, every time capital is raised or shares are issued, that ownership stake is reduced. This is why equity dilution is sometimes called founder dilution. It is also known as stock dilution, share dilution, private company dilution and startup dilution.
READ THE FULL ARTICLE BY DAVID CHISHOLM IN THE WINTER 2025 EDITION OF GAMING & LEISURE MAGAZINE.