Startup Dilution Explained for Founders
Dilution isn't losing your company — it's owning a smaller slice of a bigger pie. How each round, the option pool, and SAFEs dilute founders, with a worked example.
Equity splits, vesting, founder agreements and the legal mechanics that protect co-founder relationships when things get hard.
13 articles
Dilution isn't losing your company — it's owning a smaller slice of a bigger pie. How each round, the option pool, and SAFEs dilute founders, with a worked example.
Co-founder conflict sinks more startups than the market ever does. Here is how to spot the root causes early, prevent them, resolve live fights, and part ways cleanly.
What an 83(b) election is, why founders and early employees with vesting equity file one, the 30-day deadline that can't be missed, and how to actually do it.
What a startup term sheet is, the clauses that actually matter — liquidation preference, board control, option pool — and how to negotiate the terms that bite later.
How startup valuation really works at pre-seed and seed: why early valuations aren't math, the methods investors use, what sets the number, and how to negotiate it.
What a cap table is, how startup ownership and dilution work across rounds, how option pools and SAFEs affect it, and how to keep a clean cap table from day one.
What a SAFE is, how valuation caps and discounts work, post-money vs pre-money, SAFEs vs convertible notes, and how dilution sneaks up on early founders.
What startup vesting and the one-year cliff mean, why every founder and early hire needs them, standard schedules, and the acceleration terms worth understanding.
How startup stock options work for early employees: option pools, strike price, vesting, exercising, and what an offer of equity is actually worth before you accept.
When to incorporate a startup, how to choose between an LLC and a C-corp, why investors expect Delaware C-corps, and the founder paperwork to get right early.
Equal or earned? A clear framework for co-founder equity splits in 2026 — contribution factors, vesting, cliffs and the founder agreement that keeps it fair.
What a co-founder agreement covers — equity, vesting, roles, IP and exits — why every founding team needs one, and how to put it in place before trouble.