What does dilution mean in business?

The term “dilution” refers to the gradual loss of control over an asset when an investor receives a greater percentage of that asset in a venture and therefore a smaller percentage of the company. Therefore, the value of the remaining company decreases as a result.

What does dilute mean in business writing?

When you hear the word, dilution, you may be thinking about the natural process of water diluting a solution. However, in business, the term dilution refers to a decrease in the value of a company’s shares of stock. There are two types of dilution: structural and operating.

What does dilute mean in writing?

When you dilute something, you add a certain amount of water or another liquid to it. When you do this, the mixture becomes thinner. In business, dilution often applies to a company that goes from one, larger company structure to two or more smaller ones, either through an initial public offering (IPO) or through a merger.

What does diluted mean in business?

One of the ways that a small business can effectively grow is by increasing its equity stake. To do this, you can take in more money as an investor, either through loans or venture capital. The downside is that an investor can take over management of the company, potentially making your job more difficult. Another way around this is to dilute your existing shareholders’ stake, allowing you to grow without drastically changing your company’s structure.

What does diluted mean in English?

If you want to know what it means when someone says something is “diluted”, it means they are making it less strong. In finance, dilution refers to a decrease in the number of shares of a company. A company can “dilute” its shares by issuing more shares to existing shareholders, or by issuing shares to new investors.