As a rough rule though, (x) the start-up usually needs to be far enough along to be valued at $100m or more and (y) the founders ideally only sell < 10% of their stake, ideally < 5%, so it’s immaterial in the grand scheme of their ownership.

These days, in 2018, you actually don’t usually have to ask. If your start-up is “hot” and you are raising at a valuation of > $100m, the investors will ask you. Because they’ll generally want to buy more shares that are otherwise available, and/or to entice you to pick them.

But ask early-stage, and/or try to sell more than 5%-10% of your stake … that’s a flag. If it’s a Series A round at a $15m valuation, you can’t really sell. Not to a VC.

Because that says you don’t really think your shares will be worth all that much.

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