Dilution

“As a seed investor, I used to think my real entry price was twice what it looked because of dilution. Right now I'm thinking it's four times.”

“You don't see a bottom until these things are at free cash flow multiples, net Of dilution. And when that happens, that's your bottom.”

“Over raise. Cash is literally the single most important insurance policy that every single startup has years before they're profitable and capable of standing on their own two feet. There's no amount of optimizing for dilution that will ever convince me that r…”

“So I always recommend if you have access to capital, don't worry about the incremental dilution at this stage, because work on, you can work on making the pie bigger, and that's where you have more capital and more people around you to help you make that pie b…”

“Worry less about the economic climate, and if you have to raise capital, don't be dilution sensitive. Get the capital you need, and be success sensitive.”

“A lot of times founders who are second and third time founders don't want to even be called to have a pre-seed round because it presupposes you need a seed round. And what does that mean to you, Harry? It means that if you have a pre-seed round and you have a …”

“Every day you can push raising money out. You're saving yourself lots of dilution because the risk in the beginning is so high. You know, investors are going to want 20%, 25% on a seed round because you haven't proven anything. So every, every little thing you…”

“Founders are selling less equity in rounds than they were in the past. So typical dilution in the past might have been 30%, you know, in a round, and that might have shrunk to 20% in a round today.”

“Oftentimes, the valuation doesn't actually matter that much. People try to get another 10 or 20% higher valuation than what they have on the table right now, but you're only raising 10% of that valuation or something like that, so actually it's only gonna make…”

“I don't actually. And so, and the reason is that at the earliest stages, you have to sort of forward look the cap table. In other words, I'm going to raise a seed and I'm going to get 20% dilution to Typically the Series A, another 20 to 30% dilution, and so o…”

“So I would say in the early stages, at least, don't worry too much about valuation. It's a good idea to keep an eye on dilution, but it's better to raise less at a lower valuation and a lower dilution than to raise at a larger amount at a high valuation early …”

“I mean, best case scenario, you're talking about having your money locked up for probably over a decade, at which point the company has raised so much additional capital that your position could be diluted down to less than half of what it started with.”

“When I hear about a management team's buying back stock to offset dilution, it almost gives me an aneurysm and I want to reach through the phone or across the table and choke someone.”