Startup Dilution Explained for Founders
Dilution isn't losing your company — it's owning a smaller slice of a bigger pie. How each round, the option pool, and SAFEs dilute founders, with a worked example.
Raising money as an early-stage founder: angels, accelerators, pre-seed mechanics, and what investors actually evaluate in founding teams.
16 articles
Dilution isn't losing your company — it's owning a smaller slice of a bigger pie. How each round, the option pool, and SAFEs dilute founders, with a worked example.
A realistic, itemized breakdown of what it actually costs to start a startup — incorporation, tools, the MVP, and the runway that matters most.
When a startup needs advisors, how to find the right ones, how much equity to give, and how to structure the relationship so advisors actually move the needle.
A founder's playbook for raising a seed round: how much to raise, the traction investors expect, running a tight process, and closing the round cleanly.
What a startup term sheet is, the clauses that actually matter — liquidation preference, board control, option pool — and how to negotiate the terms that bite later.
How startup valuation really works at pre-seed and seed: why early valuations aren't math, the methods investors use, what sets the number, and how to negotiate it.
What a cap table is, how startup ownership and dilution work across rounds, how option pools and SAFEs affect it, and how to keep a clean cap table from day one.
What a convertible note is, how it works, the discount and valuation cap explained, and how convertible notes compare to SAFEs for early-stage startup fundraising.
How to bootstrap a startup: fund growth from revenue, stay default alive, decide when bootstrapping beats raising, and the trade-offs of keeping full ownership.
How to calculate runway and burn rate, what 'default alive' means, when to start raising, and the levers founders use to extend runway before the money runs out.
What a SAFE is, how valuation caps and discounts work, post-money vs pre-money, SAFEs vs convertible notes, and how dilution sneaks up on early founders.
Angel investors vs venture capital: how they differ on check size, control, speed and expectations, and which is the right fit for your stage and ambition.