The compounding arithmetic
Each round multiplies your remaining ownership by (1 − dilution). Four rounds at 20% leaves you with about 41% of where you started, before option pool top-ups.
Founders 100%
Seed −20% → 80%
A −20% → 64%
B −18% → 52%
C −15% → 45%Percentage is not the goal
45% of a $40m company is worth far less than 12% of a $500m company. Optimise for the value of your stake, not its percentage — while keeping enough ownership to stay motivated and to satisfy later investors.
Raise the right amount
Raising too little forces a premature round from weakness. Raising far too much prices in expectations you may not meet. Target 18–24 months of runway to a clear next milestone.
Key takeaways
- Typical rounds dilute 15–25% each
- Ownership percentage matters less than value of ownership