I've been an angel investor for 19 years, and my understanding of dilution has been completely transformed. These aren't the textbook lessons; these are the hard-won insights from the trenches. Here are the 13 most critical things I wish I knew when I started.
The Framework That Actually Works
Here is a simple framework for evaluating dilution. It's not complicated, but it requires discipline.
Step 1: the best solutions are often the simplest ones
This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: the market doesn't care about your roadmap
Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly
Nothing works perfectly the first time. The companies that get dilution right treat it as an ongoing process, not a one-time project.
The Counterintuitive Truth
In dilution, the best practitioners often do less, not more.
The lesson: you need to move fast and break things. It sounds simple. It's incredibly hard to execute.
What I Tell Founders
Before deciding anything about dilution, start with three questions:
What's your timeline? Because the right approach for a company with 6 months of runway is very different from one with 3 years.
What have you already tried? Most founders have tried something. Understanding what didn't work is often more valuable than knowing what might.
Who on your team owns this? If the answer is "everyone" or "no one," that's your first problem to solve.
These questions seem simple but they reveal a lot about where a company actually stands.
This connects to broader themes around dilution, SPVs, secondary markets, cap tables, syndicate investing that I've been thinking about a lot lately.
Final Thoughts
There are no shortcuts in dilution, but there are smarter paths.
The strongest teams treat dilution as a competitive advantage, not a checkbox. They invest in it early, measure it obsessively, and never stop improving.
If you're just getting started with dilution, don't be intimidated. Everyone starts somewhere. The key is to start with the right mindset and the right framework, and then execute like your company depends on it. Because it probably does.
Frequently Asked Questions
Q:How were these items selected?
Each item on this list comes from direct experience, either from building my own companies or from patterns I've observed across the 234 startups I've invested in. I prioritize practical, actionable items over theoretical concepts.
Q:Are these recommendations still relevant in 2026?
Absolutely. While specific tools and tactics change, the underlying principles remain consistent. I update my thinking regularly based on what I'm seeing in the market and across my portfolio companies.
Q:Can I implement all of these at once?
I'd strongly recommend against it. Pick the 2-3 items that resonate most with your current situation and focus there. Trying to do everything simultaneously is a recipe for doing nothing well.
Q:Which item on this list has the highest impact?
It depends on your stage and context, but in my experience, the items near the top of the list tend to have the broadest applicability. That said, sometimes the less obvious items create the biggest breakthroughs for specific situations.