How to Mitigate the Downsides of Dilutive Funding?
Entrepreneurs can take several steps to mitigate the potential downsides of dilutive funding:
Careful Selection of Investors: Choose investors who align with the company's vision and values. Negotiating Terms: Negotiate terms that protect the interests of the founding team, such as maintaining a significant ownership stake and securing board seats. Clear Communication: Establish open and transparent communication channels with investors to manage expectations and avoid misunderstandings. Long-term Planning: Consider the long-term implications of dilution and plan future funding rounds accordingly.