L3VLUP

Founder Dilution

The fall in a founder’s ownership percentage as new shares are issued. Shares are never taken away; the denominator grows. A typical path runs from 100% at founding to 50 to 65% after seed, 35 to 50% after a Series A, and 15 to 25% by a Series C, which is why the question is never "how much did I give away" but "what is the smaller fraction now worth".

How a startup is financed · 7 of 26Next: SAFE (Simple Agreement for Future Equity)

Practise it

Take a company from founding through a SAFE and a priced seed round. Set the cap, the pre-money and the option pool, watch the price per share and every holder’s stake move, then check your own arithmetic against the table.

Open Cap Table Builder, free, 15 min

Keep reading

The venture capital hub

Related Venture Capital terms

How a startup is financed: keep going

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