How does equity dilution take place?



0
Not sure why 24% is the right answer for below question.

1. after first round of funding ownership = 60 - 60 *.10 = 54
2. after second round of funding ownership = 54-54*.25 = 40.5
3. after third round of funding ownership = 40-40*.3 = 28.35

If you start out with 60% ownership as one of the founders in a company. Assuming there were 3 rounds of funding each diluting 10%, 25% and 30% respectively. Assuming you allocate 15% to employees. How much of the company will you be left with at the end of all this?

15%

24%

25%

26%

2 Answer(s)


0

The answer will come as 0.2409~24%, provided you don't round up during the initial calculations. You have missed out the dilution due to 15% shares given to employees.

0

chill maar bhai log...........

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