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Founder Dilution – How Much Is “Normal”?

Founders who “go all the way” through the process of building a lasting and sustainable/profitable business (as opposed to an early exit) will generally suffer the most dilution. In my experience, it will generally take three to four rounds of equity capital to finance the business and 20-25% of the company to recruit and retain a management team. That will typically leave the founder/founder team with 10-20% of the business when it's all said and done. The equity split at 20% for the founders will typically be; 20-25% for the management team, 20% for the founders, and 55-60% for the investors (angel all the way to late stage VC).

via Founder Dilution – How Much Is “Normal”?.

Category: Business Related


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