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Dilution

Reduction in existing shareholder ownership when new shares are issued.

Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

Definition

Dilution is the percentage decrease in an existing shareholder's ownership stake caused by the issuance of new shares - through a financing, option grants, SAFE conversion, or warrant exercise.

What this means in practice

MedTech companies typically dilute 20–25% per priced round. Founders who raise 6–8 rounds before exit can end up with single-digit ownership. Capital-efficient milestones - anything that lets you raise less or at higher valuations - directly preserve founder equity.

Primary references

3 sources

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On this term

Category: Investment & Finance
Sources: 3
Updated: 5/5/2026

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Learn in 60 seconds

Reduction in existing shareholder ownership when new shares are issued.

·MedTech companies typically dilute 20–25% per priced round.
·Founders who raise 6–8 rounds before exit can end up with single-digit ownership.
·Capital-efficient milestones - anything that lets you raise less or at higher valuations - directly preserve founder equity.

Remember this

Reduction in existing shareholder ownership when new shares are issued.

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