An instrument or event is described as dilutive when its exercise or realisation leads to an increase in the number of shares outstanding, mechanically reducing the percentage and per-share value of existing shareholders. Dilutive instruments include stock options, BSPCEs, warrants, convertible bonds and free share grants. In business valuation, dilution analysis is essential to compute the fully-diluted share count and fully-diluted per-share value — the basis typically used in fundraising and M&A negotiations. An instrument is anti-dilutive if its inclusion in the fully-diluted share count would increase earnings per share rather than reduce it.

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Example: a startup valued at CHF 15.0 million has 1,000,000 ordinary shares and 150,000 unexercised options at CHF 8 (vs. market value CHF 15). On a fully-diluted basis, the share count is 1,150,000. The fully-diluted per-share value is CHF 13.04 (vs CHF 15.00 on the basic count alone) — a 13% dilution that Series B investors factor into the pre-money valuation negotiation.

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Hectelion systematically computes fully-diluted valuations in fundraising and startup valuation mandates to provide accurate per-share economics.