Dear SaaStr: Is It Normal for a Founder CEO to End Up With Just 10% Equity?

Yes — if you are venture-backed.

Roughly speaking, this is what generally will happen after 3 rounds of traditional venture capital.  Expect it and plan for it. If the company sells 15–20% in each round, and 15–20% is reserved for employees, that typically will leave 15–25% for the founders in total.

At IPO, the average SaaS Founder-CEO owns 15%.  The average co-founder?  About half that.  More here.

It’s not the end of the world. This is after 3 full rounds of venture capital, and if you are then on the path to IPO or Big Acquisition (which hopefully you are if you take 3 rounds), that 10% (or whatever amount) will still be worth a lot.

But if you can — skip a round. Or at least, half a round — by stretching a little longer until the next round.

Be a little bit more frugal. Maybe even, don’t take that extra round if you don’t need it and can’t put it to good work.

Carta: The Actual, Real Dilution from Series A, B, C and D Rounds

Related Posts

Pin It on Pinterest

Share This