Dilutive Funding

Capital provided to a company in exchange for equity or ownership stake — including angel investment, venture capital, and accelerator equity. Contrasts with non-dilutive funding, which does not require giving up ownership.

Full Definition

Dilutive funding increases the total number of shares outstanding, reducing (diluting) the ownership percentage of existing shareholders. At each funding stage from Pre-seed through Series A, dilutive rounds set a valuation, issue new shares, and bring investors onto the cap table. The trade-off is access to capital and expertise in exchange for a portion of future returns. In healthcare innovation, dilutive and non-dilutive funding are frequently used together — grants de-risk the asset while equity investment funds commercial development.