Founder & CEO, Marketplace Risk | Mission-driven thought leader | Marketplace + digital platform trust & safety, risk mgmt + legal strategy | 20 years advising + counseling founders, leaders, investors + boards.
Helpful info for founders. I often get the question about how much is the right amount of equity… Here you go…a good guidepost.
Founders - if you run into a VC demanding 30% of your company in an early-stage round, you should probably leave the Zoom 😁 Below we show the median dilution in both primary and bridge rounds across the early rounds for VC-backed companies. All data is from US companies who've raised their round since January 2023. Splitting this into primary and bridge rounds is essential because: • There are a lot more bridge rounds happening these days (this data is for priced bridges or extensions, but many are happening on SAFEs or convertible notes as well) • The dilution in bridge rounds is about typically about half as much as in a new primary round - which makes sense given they are usually smaller and designed to get founders to the next major milestone So - what's the current equity percentage sold in these fundraises? 𝗦𝗲𝗲𝗱 • Primary = 20.7% sold in 2024 • Bridge = 13.2% in 2024 • Not much change but so many companies are now raising multiple seed rounds as breaking through to Series A is becoming more difficult. 𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 • Primary = 20.0% • Bridge = 10% • Nice round figures! 𝗦𝗲𝗿𝗶𝗲𝘀 𝗕 • Primary = 15.9% • Bridge = 8.1% 𝗦𝗲𝗿𝗶𝗲𝘀 𝗖 • Primary = 12.9% • Bridge 4.8% Obviously you won't do a bridge round at each stage - and you may skip rounds altogether. There's no one way to make it through to a billion dollar valuation! Share with a founder whose out fundraising right now 🙏 #cartadata #fundraising #dilution #startups #founders ---------- Pasture-raised, never frozen startup data out every week in our Data Minute newsletter - you can subscribe for free here: https://lnkd.in/gNa_Dk-F