Definition
The act of reducing ownership percentage by issuing new shares, or what happens to founders' equity every time VCs open their checkbooks. In chemistry, it means adding solvent to weaken a solution; in startup world, it means your 50% stake just became 30% and you're supposed to smile because the company is now "worth more." The most expensive way to raise money without technically losing money.
Example Usage
After three rounds of funding, the founding team found themselves heavily diluted down to just 15% ownership.
Source: Finance and startup terminology via standard dictionaries
Related Terms
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See “diluting” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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