How Does Dilution Work?

At the outset, dilution is the process of pro rata deduction of ownership percentage as additional holders are added to a company’s capitalization chart. Dilution happens as the number of shares held by a person is static while the total number of outstanding shares (the denominator) grows (e.g. 1/1 = 100% | 1/10 = 10% | 1/100 = 1%). If you bring investors or others onto your company’s cap chart dilution is unavoidable...

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