Dilution vs Runway
Dilution (Ownership Reduction) and Runway (Months of Survival) 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: Dilution refers to ownership reduction, while Runway refers to months of survival — they describe different things even when they show up in the same sentence.
Dilution — Ownership Reduction
Your ownership shrinks as you raise. Percentage of a bigger pie can still be a win.
Runway — Months of Survival
Months of survival at current burn rate. Growth without runway = death.
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.
When to use Runway
Reach for "Runway" when the conversation is specifically about months of survival. Months of survival at current burn rate. Growth without runway = death.
FAQs
What is the difference between Dilution and Runway?
Dilution stands for Ownership Reduction — Your ownership shrinks as you raise. Percentage of a bigger pie can still be a win. Runway stands for Months of Survival — Months of survival at current burn rate. Growth without runway = death.
Are Dilution and Runway the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. Dilution = Ownership Reduction. Runway = Months of Survival.
When should I use Dilution vs Runway?
Use Dilution when you're specifically referring to ownership reduction. Use Runway when the topic is months of survival.