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On the flip side of that coin is the point that a smaller percentage of something successful is much better than a large percentage of zero. In theory, investo
by banned_man 18y ago
On the flip side of that coin is the point that a smaller percentage of something successful is much better than a large percentage of zero.
In theory, investor dilution shouldn't matter. If you have 50% of a $10 million company and $5 million is invested, you now have 33.3% of a $15 million company. In fact, due to intangible benefits of the investment (mentorship, connections, prestige) you should be coming out ahead. In practice, this obviously isn't always true-- because no one knows what the true fair value of a company is, and giving up control can be disadvantageous-- but it is often true. Turning down, say, Y Combinator because 100% matters that much more to you than 94% would just be stupid.