

The Dilution Concern for Founders - vcexperts
http://vcexperts.com/vce/news/buzz/archive_view.asp?id=707

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josephruscio
It's a concern, but any amount dilution is better than infinite dilution (i.e.
turning off the lights).

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fizx
Assuming zero opportunity cost...

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josephruscio
So there is a level of dilution doesn't make sense, but I don't know that a
good VC would proffer them. Does a VC no good to close a round and have the
whole team walk away. I think this article is talking about situations where
dilution is painful, but within the realm of reason.

Assuming even a small/moderately sized team, i.e. other people than just the
founders are also employed, a good VC will grant new options to employees. The
founders get hurt the most. If the VC's want to keep the founders around, then
they need to ensure they're properly incentivized as well.

In some cases, you can get the deal done to take care of your people. Then
unwind yourself and move on.

