What is the usual percentage of shares that go to seed, Series A, and Series B rounds?

Context specifics will always drive a more accurate answer. Much depends on the valuation and other variables, which this question asks to put aside.

The general rule of thumb is:

For seed rounds, expect anywhere from 10% to 25% as a normal range.

For  expect 25% to 50% on average.

For Series B, expect roughly 33%.

As you advance to the next funding round, you should realistically expect further dilution. Founders start with 100% ownership. Seed rounds – the earliest stage of funding, usually from family and angel investors – typically dilute founders’ ownership by an average of 15%.

By the time you reach the Series A stage, you need to be prepared for further dilution. Series A investors are usually funders who provide venture capital for emerging companies. Since their funding typically exceeds $2 million, their percentage of ownership can be as high as 50%.

If you get to the Series B round, expect a dramatically different mindset from earlier funders. Whereas Series A and seed investors believe in your vision and have bought into the prospects of your company, those in Series B want to see that you’ve successfully progressed and satisfied important milestones. They typically see about 33% ownership, which will dilute all previous ownership percentages.

You also need to reserve a percentage for the option pool – usually, about 10% to 15%.

If you’d like to receive further guidance from vetted on-demand lawyers about venture capital funding for your company, feel free to check out LawTrades.

-R

What is the usual percentage of shares that go to seed, Series A, and Series B rounds?

Comment

There is no comment on this post. Be the first one.

Leave a comment