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This is all true but it's important to remember dilution IS what you want if you're signing up to work at a startup. No dilution means no growth, flat and simpl
by kaesar14 4y ago
This is all true but it's important to remember dilution IS what you want if you're signing up to work at a startup. No dilution means no growth, flat and simple. If your founders aren't expanding the pie, what chance do you have of walking away with a payout?
Larry and Sergey owned 100% of $0 and like, 20% of $1 trillion. Which would you rather have?
- seanhunter 4y agoKinda. It depends on whether the business has a positive enough return on this additional equity to offset the dilution, in which case it is absolutely what you want. For example, if a new employee comes on board and gets a grant everyone else gets diluted a bit. This is a good deal if the new employee will generate sufficient value to offset this dilution. I think we can all come up with examples where this would or would not be the case. Likewise with investors. Sometimes a new round will be exactly what a company needs to light the touchpaper and everyone will see a huge benefit in spite of dilution. Sometimes it’s just more cash on the big bonfire and not only does it not fix the fundamental problem but also hurts all the existing holders to add insult to injury.
- kaesar14 4y agoI completely agree, but my point is that there's not really a situation (at a VC funded tech company) where you're not getting diluted and you're still getting growth on your equity