# What is Dilution?

The drop in each owner's percentage when a company issues new shares. Investors track it because every new round shrinks their slice, even if the company as a whole becomes more valuable.

## In real work

After the seed round sold 20 percent of the company, dilution took Amara's stake in the tutoring startup from 10 percent to 8 percent.

## Related terms

- [SAFE](https://prompthausapp.com/learn/safe.md)
- [Valuation Cap](https://prompthausapp.com/learn/valuation-cap.md)
- [Pro Rata](https://prompthausapp.com/learn/pro-rata.md)
- [Limited Partner](https://prompthausapp.com/learn/limited-partner.md)
- [Carried Interest](https://prompthausapp.com/learn/carried-interest.md)

## How is this different from Googling it?

Google gives a definition. Prompthaus pairs each term with how it shows up in standups, PRs, prompts, and design reviews. Then it quizzes you until the word sticks. One term a day on iPhone.

- Category: Venture
- HTML: https://prompthausapp.com/learn/dilution
- App Store: https://apps.apple.com/us/app/prompthaus-ai-vocabulary/id6776314407