SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-equity-dilution

What usually happens to a founder's percentage when new shares are issued?

The founder's ownership percentage is usually diluted.

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  1. The founder's share count automatically doubles
  2. The founder's percentage usually shrinks ✔
  3. The company must repay all investors

Why: Issuing new equity increases the total ownership denominator. A founder may keep the same number of shares but own a smaller percentage of the company.

Huh, didn't know that: A new or increased option pool can also dilute existing holders.

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Why did the percentage bring water? Everyone said it was getting diluted.
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References

Answer: The founder's percentage usually shrinks. Issuing new equity increases the total ownership denominator. A founder may keep the same number of shares but own a smaller percentage of the company.

  1. SAFE conversion calculator www.ycombinator.com/safe/calculator
    The new or increased pool in connection with the priced round dilutes both founders and SAFE holders
    Checked 2026-10-11.

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