Cap Table vs Dilution
Cap Table (Capitalization Table) and Dilution (Ownership Reduction) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: Cap Table refers to capitalization table, while Dilution refers to ownership reduction — they describe different things even when they show up in the same sentence.
Cap Table — Capitalization Table
Who owns what and how much. A messy cap table scares investors.
Dilution — Ownership Reduction
Your ownership shrinks as you raise. Percentage of a bigger pie can still be a win.
When to use Cap Table
Reach for "Cap Table" when the conversation is specifically about capitalization table. Who owns what and how much. A messy cap table scares investors.
When to use Dilution
Reach for "Dilution" when the conversation is specifically about ownership reduction. Your ownership shrinks as you raise. Percentage of a bigger pie can still be a win.
FAQs
What is the difference between Cap Table and Dilution?
Cap Table stands for Capitalization Table — Who owns what and how much. A messy cap table scares investors. Dilution stands for Ownership Reduction — Your ownership shrinks as you raise. Percentage of a bigger pie can still be a win.
Are Cap Table and Dilution the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. Cap Table = Capitalization Table. Dilution = Ownership Reduction.
When should I use Cap Table vs Dilution?
Use Cap Table when you're specifically referring to capitalization table. Use Dilution when the topic is ownership reduction.