Explaining the value of dilution stages in startup funding.
Entrepreneurs should understand that a smaller piece of a much bigger pie is far more valuable than 100% of a minor or non-existent pie. Dilution is the price of growth. It provides the capital needed to hire talent, develop the product, and acquire customers—all of which increase the overall company value (the "pie").
The investors' stairway, often referred to as the Venture Capital (VC) or Funding Stairway, is a model that illustrates the typical progression of a startup's fundraising journey from inception to maturity.
For entrepreneurs, understanding this model is crucial for successful fundraising.
