dilute

Definition

The art of watering down your ownership stake in a company, usually because someone with deeper pockets decided your equity pie needs more slices. In the startup world, this happens when new investors come aboard and everyone's percentage shrinks faster than your enthusiasm during Series D. It's not personal, it's just cap table mathematics.

Example Usage

After the latest funding round, my 5% equity got diluted to 2.3%, but hey, at least 2.3% of something is worth more than 5% of nothing.

Source: Common venture capital terminology

Related Terms

Advanced

qualified financing

A minimum funding round size (typically $1-2 million) that triggers the automatic conversion of SAFEs or convertible notes into equity. It's the threshold that separates real funding rounds from friends-and-family pocket change.

🚀 Startup / VC

Intermediate

pro rata rights

The sacred privilege granted to investors allowing them to maintain their ownership percentage in future funding rounds by ponying up more cash. It's like a VIP pass that lets you keep throwing money at a company before it becomes wildly successful or spectacularly flames out.

🚀 Startup / VC

Advanced

zombie VC

A venture capital firm that's functionally dead but still managing old funds, unable to raise new capital but too undead to fully shut down. They're not investing in new companies but still collecting management fees from their limited partners.

🚀 Startup / VC

Intermediate

Moonshot

An ambitious, seemingly impossible project that aims to solve a massive problem, named after the Apollo missions because both require billions of dollars and a willingness to ignore the odds. For every actual moonshot, there are a thousand founders calling their food delivery app a moonshot.

🚀 Startup / VC

Intermediate

power law

The mathematical reality that in venture capital, one or two investments generate nearly all the returns while the rest are mediocre or dead. Why VCs can lose money on 90% of their portfolio and still return 3x the fund.

🚀 Startup / VC

Beginner

Founder

The person who started a company and will remind you of this fact in every meeting, email signature, and LinkedIn post until the heat death of the universe. They wear the title like a crown, even when the kingdom is a WeWork desk and two interns.

🚀 Startup / VC

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