How Much of Your Company Will You Sell in Each Venture Round

Founders - how much of your company will you sell in each round?

This is one area where the conventional wisdom actually holds up quite well when compared to the empirical data.

If you polled a number of VCs, they'd probably say you're likely to part with about 20% of your company in both the seed and Series A stages.

Data matches that exactly!

But the median in this case obscures a wide distribution of ownership, especially within the Series A and Series B stages. There are primary A rounds where only 10% is sold and rounds in the same stage where 30% changes hands.

𝗠𝗲𝗱𝗶𝗮𝗻𝘀

Priced seed rounds: 20% sold Series A: 20% sold Series B: 17% sold Series C: 12.6% sold Series D: 8.1% sold

𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗗𝗲𝘁𝗮𝗶𝗹𝘀

• Wider distributions at the earlier stages, which is probably to be expected as more companies are included in those tiers.

• This is reflective of primary rounds only - ownership percentages sold in bridge rounds vary more widely.

• This data is fairly insensitive to location. It seems as though Series A dilution is broadly similar no matter if your round is happening in Ohio or New York.

• More sensitive to industry. A little less sold per round for consumer tech, a little more sold for energy startups.

• Encouraging to see that dilution has not increased dramatically as the market worsened. This is likely due to fewer deals getting done (and perhaps some more onerous terms for the founder in current term sheets)

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