The idea of plotting a company’s Equity Fingerprint was devised by Philip Baddeley, a Cambridge based entrepreneur, Business Angel and mentor. An Equity Fingerprint encapsulates the equity structure and valuation of a business, which is essentially an equity map that plots the effect of shareholder dilution overtime as additional rounds of funding are closed.
Apart from being a useful tool for entrepreneurs, the Equity Fingerprint Methodology is also now being used as a research tool and a means of teaching the role of external equity finance in the growth of new ventures. To find out how to plot your own company’s Equity Fingerprint and see examples of other successful high-growth businesses such as Google and Cambridge Silicon Radio download The Essential Guide to Equity for Entrepreneurs.
When considering the possibility of dilution in order to raise additional finance, just remember that in the long run, it’s better to have a small piece of a large pie than a large piece of a small pie!
