{"ok":true,"canonical_url":"https://dealroom.so/glossary/dilution","api_url":"https://dealroom.so/api/public/glossary/dilution","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"dilution","term":"Dilution","group":"Reading the business","definition":"A reduction in the value of an asset or the ownership percentage due to the issuance of new shares or a decrease in its intrinsic worth. For a buyer, dilution can impact the effective value of your equity or certain business assets post-acquisition.","what_it_means":"In the context of business assets like accounts receivable, dilution refers to reductions from returns, allowances, or uncollectible accounts that lower the actual cash received. When evaluating the quality of receivables, you need to factor in historical dilution rates to accurately project cash flow and avoid overpaying.","url":"https://dealroom.so/glossary/dilution","official_sources":[],"related":[{"slug":"accounts-receivable","term":"Accounts receivable","url":"https://dealroom.so/glossary/accounts-receivable"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"}],"related_questions":[]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Dilution","url":"https://dealroom.so/glossary/dilution","source_type":"DealRoom Data"}}