Somer G. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a ...

For startup founders, few concepts are as important—or as commonly misunderstood—as dilution. It often first arises during a financing round, when investors receive equity (i.e., shares) in exchange ...

Share dilution decreases value per existing share by adding more shares to the market. Earnings per share lower post-dilution, impacting investment value negatively. Investor awareness of SBC and ...

Stock dilution occurs when a company issues additional shares, resulting in a decrease in the ownership percentage of existing shareholders. The reduction in ownership can significantly impact the ...

Founders frequently underestimate the equity dilution impacts of funding rounds and employee stock option plans (ESOPs). Consider two stark examples: Eric Yuan's ownership in Zoom dwindled to 22% by ...