Dilution is one of the most misunderstood concepts in private investing.
Simple example
You invest in a startup at a $10M valuation and own 1% (worth $100,000)
The company raises a new round at a $50M valuation, issuing new shares
After dilution, you own 0.6%, but 0.6% of $50M = $300,000
Your ownership percentage dropped, but your value tripled
Why does dilution happen?
Companies issue new shares to raise capital for growth. Each funding round (Series A, B, C, etc.) typically dilutes existing shareholders by 15–25%.
How does dilution affect your investment over time?
In the example above, despite significant dilution, your investment value grew 9x because the valuation grew faster than your ownership shrank.
When dilution is bad?
If a company raises money at a lower valuation than the previous round (a "down round"), dilution reduces both your ownership percentage and your investment value.
What Wealt shows you?
Your portfolio displays the current estimated value of your investment, accounting for dilution. You can see dilution events on the cap table chart in each deal's detail page.