Raising a seed round? That'll be 20%, please.
One of the more frequent questions we get from founders is, "how much of my company should I expect to sell in each venture stage?"
For awhile now, the answer at Seed and Series A has been simple: 20%.
And in 2024, that advice held true. Actually kind of eerie how steady that 20% mark tends to be (well, actually not eerie at all, given that 20% is driven by the economics of the venture fund and has very little to do with the capital needs of the business).
From the graphic below, you can see that primary round dilution starts at 20% and then drifts down as you raise the later stage rounds, settling around 9% for a Series D. This only looks at software-based companies (sorry hardware founders, your dilution is a bit worse).
But wait - that's not all the equity you need to account for as a founder.
If you end up needing a bridge round (and bridges are everywhere these days), that will cost equity as well. Typically the bridge or extension will come in at about half the equity price of the original primary.
If you raised a Seed for 20% of the company, and then a Seed Extension for another 10%...that adds up very quickly!
𝗥𝗮𝗻𝗱𝗼𝗺 𝗧𝗵𝗼𝘂𝗴𝗵𝘁𝘀
Will 20% hold in an age of AI? If a company needs less cash to build, perhaps venture investors will have to make do with less ownership...but what happens then to their portfolio model?
IMO, we're using bridges too often. And this data doesn't even get into the convertible note or SAFE bridges, which are equally rampant.
Dilution begs questions of control. Most founding teams will not hold majority equity control by the time they finish their Series A raise (although when you add back in the option pool, it's close).
I wonder why Seed and Series A are identical while the other stages have significant gaps...perhaps progress between those two stages is less predictive of ultimate success? Or maybe it's that later stage founders are in better negotiating positions?
Share with a fundraising founder!
#startups #founders #dilution #fundraising #venturecapital
Subscribe for more startup data aged in quality oak barrels - the finest vintages can be found in our Data Minute newsletter at the link in graphic.
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. © 2026 Carta. All rights reserved. Reproduction prohibited.
