Back to glossary
fundraising

Dilution

Reduction in ownership percentage when new shares are issued to investors.

Dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders. While dilution is normal in fundraising, founders must balance growth capital needs against maintaining meaningful ownership.

Formula

New Ownership % = Old Ownership % × (Pre-Money / Post-Money)

Tips

  • Plan for 15-25% dilution per round
  • Maintain at least 50% founder ownership through Series A
  • Anti-dilution provisions protect against down rounds

Related Terms

CAP TABLEVALUATIONSEEDSERIES ATERM SHEET

Calculate all your metrics automatically

CharliA generates a complete financial model with LTV, CAC, MRR, Runway and all SaaS metrics calculated automatically. In 2 hours.

Generate my financial model
dilution definition, equity dilution, startup dilution, dilution calculation, avoid dilution