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The Investment Offering TableInvestors also want to know how you plan to distribute stock ownership and handle dilution. This is especially important when a start-up needs multiple rounds of financing, but even with a more simple investment plan, the investors want to know what you plan to do with shares. How many shares of stock are there, how many do the founders already own, how many are pledged to employees, and how many will be offered to future investors? Investment Offering Table
The Investment Offering Table lays the groundwork for the investor. It shows the investors the plan for stock ownership and dilution through three rounds of investment. (Note: dollar values are displayed in thousands.) The most important reason for the investment offering table is to show the impact of dilution as a growth company absorbs several rounds of investment. Perhaps the easiest way to explain this is to focus on the seed investors and the change in their return after dilution by comparing the table above to what it would be without any additional dilution, as shown in the table below. The Offering Without Dilution
Without dilution, the projected IRR for the seed investors is still 145%. Compare this to the previous illustration, with dilution. (Note: dollar values are displayed in thousands.)
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