ANTI-DILUTION PRACTICES

This apparent horror story leads many founders to take staunch anti-dilution measures. But dilution serves a purpose: to attract skilled people and resources to your startup.

Whether it’s incentivizing a respected VC with a sizeable ownership stake, or luring top talent with an options pool, offering equity is beneficial to your startup, and attempting to hold on to as much equity as possible could limit your growth. Taken to extreme, anti-dilution practices could leave you as the majority shareholder of a worthless company.