Founders - if the VC is asking for 30% of your company for the seed round, send them here.
Under 10% of software seed rounds raised in 2025 sold 30% or more.
Deep tech is a little different. The "long-tail" of higher dilution is much more present for hardware, biotech, energy, and materials startups.
Data: 3,112 primary priced rounds raised by US startups on Carta. And that "primary" piece is important - this excludes a lot of little bridge / extension financings.
The market today:
𝗦𝗲𝗲𝗱
Medians: 20% in software, 21% in deep tech
Deep tech deals have a wider distribution than software
Does NOT include the conversions from SAFE financings (of which there are many)
𝗦𝗲𝗿𝗶𝗲𝘀 𝗔
Medians: 18% in software, 22% in deep tech
AI companies pulling the median dilution down in software at this point
𝗦𝗲𝗿𝗶𝗲𝘀 𝗕
Medians: 14% in software, 16% in deep tech
So...why does dilution seem to be gently declining?
Some ideas:
Valuations for AI-native companies have risen even faster than the amounts they raise. Higher val pace vs round size and you've got less % sold.
Round consolidation plays a role. If fewer companies are getting to raise at all, but when they do raise they rake in cash, it stands to reason the deals getting done are more competitive on average. Multiple term sheets = a tendency for lower dilution in the chosen deal.
Some alignment nationwide. Definitely still the case that deals done in Dallas are different than those in Silicon Valley — but the general trend is towards alignment on standards.
Are bad deal terms taking the place of headline dilution? Not really. Deals with high liq prefs, participating preferred, etc are being chased out of the early-stage market (and good riddance).
Stat for you - only 3% of Seed+Series A deals in 2025 had liq pref over 1x.
Now, to be perfectly clear - is this your only term sheet & do you absolutely need the cash? Then take the deal. D͟o͟n͟'͟t͟ ͟l͟e͟t͟ ͟a͟ ͟f͟o͟c͟u͟s͟ ͟o͟n͟ ͟d͟i͟l͟u͟t͟i͟o͟n͟ ͟k͟i͟l͟l͟ ͟y͟o͟u͟r͟ ͟c͟o͟m͟p͟a͟n͟y͟.
But "this is the market" just doesn't cut it as a reason for heavy dilution these days 😁
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