This article explains what dilution is, it's effect on your cap table and how it is presented in the Optio cap table.
Dilution happens when the number of shares outstanding in your cap table increases, i.e. it decreases existing shareholder's stake in the company.
For example, if you own 1 000 shares and there are 10 000 existing in the company, your stake is 10 %. If your company then creates another 10 000 shares (total is now 20 000) for new investors, your stake is now 5 % of the company.
Dilution often happens when equity incentives like stock options or RSUs are exercised, or the company issues new shares to investors due to a funding round.
In the Optio Cap Table, you can view the Dilutive Quantity (for example options that have not yet been exercised) and the Dilutive Ownership which shows how the shareholder's stake in the company, after all dilutive instruments have been converted into shares.
In the Optio Cap Table, all securities of type 'option', 'rsu', 'psu', 'warrant’ and 'convertible' are shown in the cap table as dilutive quantity.
Dilution is common for startups as they raise money and issue stock options to employees, but you as a founder and/or cap table administrator always want to have full insight into what the potential dilution might be.
With Optio's cap table you have one source of truth and no hassle or concern with calculating the dilution effect.