How to Calculate Dilution ?

Naresh

Assume you are an investor and own 15% in a company. Now if the company raises more money by diluting 30% to the new shareholders, what will be your ownership in the company?

In this Question how to calcualte Dilution

Oct 24 2013 12:49 PM

2 Answer(s)

Binny

So before raising money you own 15% in the company.

Due to the new round of money you get diluted by 30%, which means that your stake in the company will reduce by 30%

.15 x (1-.3) is your new equity in the company

Oct 24 2013 01:15 PM

Binny

Click this link to read about the Ultimate Guide to Financial Modelling

Nov 11 2013 12:47 PM

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