# Equity dilution

`kaal:entity:equity-dilution`

**Status.** derived

This node is assembled mechanically from the 5 claims that carry the concept tag `equity-dilution`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

5 claims across 3 works, 2012 to 2018.

**2012**

- [2097160-004](https://wulfkaal.github.io/claims/2097160-004) [condition/argued] -- The conversion feature of contingent convertible bonds affects corporate governance in a SIFI only if issuance volumes are sufficient and design features are adequate, because the governance effect runs through the threat of dilution of existing equity positions.
  > If sufficient volumes of contingent convertible bond issuances are combined with adequate design features, the conversion feature of contingent convertible bonds and the threat of dilution of equity positions in SIFIs could affect corporate governance in SIFIs.108
  Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160
- [2097160-012](https://wulfkaal.github.io/claims/2097160-012) [failure/argued] *(failure mode)* -- Contingent convertible bonds issued to executives are typically too small in volume to dilute investors' equity holdings or to supply a meaningful equity infusion during a crisis, so copying investor CoCo designs for executive pay produces suboptimal outcomes.
  > contingent convertible bonds may be issued to executives in volumes that may not suffice to dilute investors' equity holdings. The lower volume of contingent convertible bonds issued to executives may not provide a sufficiently strong equity infusion during a crisis.
  Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160
- [2097160-021](https://wulfkaal.github.io/claims/2097160-021) [mechanism/argued] -- The impending threat of dilution from a possible conversion of investor-held contingent convertible bonds can motivate existing shareholders to become actively involved in the governance of the entity.
  > The impending threat of dilution for existing shareholders due to the possible conversion of the contingent convertible bonds held by investors may motivate existing shareholders to get actively involved in the governance of the entity.181
  Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

**2017**

- [3067615-016](https://wulfkaal.github.io/claims/3067615-016) [mechanism/argued] -- ICOs are preferable to venture capital funding for many start-ups first and foremost because ICO promoters and their developers are not forced to sacrifice equity in the project in exchange for the funds they raise.
  > First and foremost, ICO promoters and their developers are not forced to sacrifice their equity in the project in exchange for the funds they raised.36
  Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615

**2018**

- [3117224-002](https://wulfkaal.github.io/claims/3117224-002) [mechanism/argued] -- Unlike other means of capital formation, ICOs allow promoters to raise funds without sacrificing equity, so proceeds can be used exclusively for product development.
  > Unlike other means of capital formation, ICO's allow promoters to avoid sacrificing equity for financing. Instead, ICO promoters can use the proceeds of the ICO exclusively for product development.
  Wulf A. Kaal, Initial Coin Offerings The Top 25 Jurisdictions and Their Comparative Regulatory Responses (2018). SSRN: https://ssrn.com/abstract=3117224

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/equity-dilution.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.