What does diluting mean in business?

In the simplest terms, diluting simply means spreading your assets and business among several different service providers. For example, if you're a plumber, you might take over a plumbing company you purchased from your cousin. Rather than relying on just one plumber working for you full-time, you could hire several plumbers to work for you part-time to help make ends meet. This is essentially what "diluting" means. By spreading your business among several different service providers, you not only

What does diluting mean in business terms?

“Diluting” is a term for reducing the number of shares of stock that an individual or company has in its business. This may be done to reduce the company's risk, as a lower number of shares means that if the company fails, the loss is less likely to be catastrophic. It may also be done to increase the company’s options in the future, as a lower number of shares will mean the company will be more affordable to buy or take over.

What does diluted mean in a business term?

A business that is partially or fully owned and operated by one or more partners is called a limited liability company (LLC). The capitalization of an LLC is the money invested in the company. When the capitalization of an LLC is partially or fully owned by the partners, it can be difficult to say who is the owner and who are the partners. In this case, the partners will often transfer their capital into the company as debt. This debt is called debt capitalization and is shown as a

What does diluted mean in business terms?

The word “diluted” refers to the shares that one investor receives once a company goes public. For example, if a company is privately held and you have 10 shares—and want to sell those shares—you’ll sell them for $100 each. But if you want to sell shares to the public, you’ll have to dilute the existing shares by issuing 100 shares for $100 each. In other words, the per-share amount will be reduced to

What does dilution mean in business terms?

According to Investopedia, the term “dilution” means an increase in the number of outstanding shares of a company. When a privately held company goes public, it usually has to issue more shares to cover the costs of the IPO. This is known as “share dilution.” A dilution of shares will occur when existing shareholders sell some or all of their shares to new investors.