really understand dilution and how different forms of fundraising and
compensation for employees work. I’ve heard
people say equity is the most expensive money, but I’m not really sure what
that means. I started the company, so I should own it. I understand that
investors want equity, but if I give them too much, it won’t be my company
anymore. Even if I never give any investor more than 50%, f I keep needing more
money, it won’t be long before I have less than 50%.
have a ton of cash, so I’d like to pay people with options. How do options dilute me?
My lawyer told me that 20% is usually set
aside for options. That means I only own
80% before I get other investors. If I give investors 31% for their investment,
I lost control, right?