Dilution 101: How Your Stake Keeps Getting Diluted With Each New Round
It is common knowledge that when you raise money multiple times your ownership percentage in the company goes down.
Calculating the final equity stake that you, as a founder or early-stage investor, will have at the time of exit is quite difficult, specially in case of on several funding rounds or introduction of employee stock option plans. Dilution is the reduction in the ownership percentage in a certain company as an effect of the issuance of shares.
