Seed Round 30 Percent Dilution Is Not Market Standard

Founders - if investors are asking for 30% in your seed round, point them to this chart.

Less than 10% of software seed rounds in the last 6 months have sold 30% or more.

I thought reposting the chart below would be worthwhile as this was the number 1 question I got from founders at NY Tech Week.

Data covers 904 primary priced rounds raised by US startups on Carta. And that "primary" piece is important - this excludes a lot of little bridge / extension financings.

Here's what the market is today:

𝗣𝗿𝗶𝗰𝗲𝗱 𝗦𝗲𝗲𝗱

• Median is 20% sold in this round

• Under 10% is more common than over 30%

𝗦𝗲𝗿𝗶𝗲𝘀 𝗔

• 18% is median, slightly down from earlier in 2024

𝗦𝗲𝗿𝗶𝗲𝘀 𝗕

• 15% median, but a pretty wide range under 25%

𝗦𝗲𝗿𝗶𝗲𝘀 𝗖

• Nearly half go for less than 10% sold

• 10.5% is the median across all rounds in this stage

Now, is this your only term sheet? Do you absolutely need the cash? There are valid reasons to sell 30% sometimes.

But "this is market" is not one of them 😁

Caveat: hard tech businesses like biotech, hardware, etc may see higher dilution per round.

Second Caveat: Sometimes rounds in non-core markets come with slightly higher dilution. But not always! Sometimes due to their relatively small size, rounds in not NYC or SF are actually less dilutive.

Share with a fundraising founder!

#startups #dilution #seed #founders