Most guides on dilution are written for VCs, not founders. They tell you what to do, but not why, or how to negotiate from a position of strength. This is the guide I wish I had when I was raising my first round—a founder-friendly approach to building a dilution that protects you.
The Counterintuitive Truth
In dilution, the best practitioners often do less, not more.
The lesson: timing is everything in this game. It sounds simple. It's incredibly hard to execute.
Why Most Approaches Fail
Many common approaches to dilution are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Reality Nobody Talks About
A lot of the advice on dilution rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that you should focus on one thing and do it exceptionally well. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that timing is everything in this game. Once they make the switch, everything changes.
The AI Angle
Any discussion of dilution in 2026 has to include AI. As someone who's invested in Anthropic, OpenAI, Scale AI, and Hugging Face, I have a front-row seat to how AI is transforming this space.
The short version: AI makes good practitioners better and bad practitioners worse. It's an amplifier, not a replacement.
Some teams use AI to get far more out of dilution. Others spend heavily on AI that solves the wrong problem. The difference comes down to understanding what you're actually trying to achieve.
This connects to broader themes around dilution, rolling funds, follow-on investing, portfolio construction that I've been thinking about a lot lately.
Wrapping Up
I've shared a lot here, and I know it can feel overwhelming. But you don't need to get dilution right on day one. You just need to get started and keep improving.
Founders who do well at dilution tend to share one trait: they're relentlessly practical. They don't chase perfection. They chase progress.
That's the mindset I'd encourage you to adopt. Start where you are. Use what you have. Do what you can. And keep pushing forward.
As always, I'm rooting for you.
Frequently Asked Questions
Q:Do I need technical skills for dilution?
Not necessarily. While technical understanding helps, the most important skills are clear thinking and the ability to break problems into smaller pieces. Many successful founders I've invested in started with zero technical background and either learned enough to be dangerous or found the right technical partner.
Q:How long does it take to get dilution right?
The timeline varies depending on your starting point and resources. For most founders, expect 2-4 weeks for initial setup and 2-3 months to see meaningful results. I've seen teams move faster when they focus on one thing at a time rather than trying to do everything at once.
Q:What tools do I need to get started?
Start with the basics. You don't need expensive software or fancy tools. A spreadsheet, a note-taking app, and direct access to your customers will get you further than any enterprise platform. Add tools only when you hit a specific bottleneck.
Q:How do I measure success with this approach?
Pick one or two metrics that directly tie to your goal and track them weekly. Vanity metrics like page views or follower counts rarely matter. Focus on metrics that reflect real engagement or revenue impact.