I am often asked about dilution. It’s a key question for most every entrepreneur who plans to go beyond a sole proprietorship. If you are bringing on investors, partners or employees you will likely face the question (can I have equity)…
I have a very clear view on the subject. Dilution is a bad word. Dilution implies you are losing something. I never GIVE anything away. I don’t “dilute” my companies or myself… I expand. I grow. I upgrade. I push the limits… And in that process I also “align interests” by sharing some of my prized equity for their networks, intellectual brilliance, work effort, products or ideas. But they are never gifts. Never.
If you want to change the world or just dominate the local pizza marketplace you might want to use your equity to incent others to jump in with you and help you achieve your dreams.
And yes, I’m a smaller piece of a bigger guy all day long…. So, although others may tell you that you are “diluting” yourself, remind them (and yourself) this isn’t dilution, you are trading equity for rocket fuel.
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Yours in startups,
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