Yes. Roughly speaking, this is what generally will happen after 3 rounds of traditional venture capital. 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.

A few slightly older analyses here: The Pernicious Effect of Dilution in SaaS: The Cold, Hard, Bloody numbers – SaaStr

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.

View original question on quora

Related Posts

Pin It on Pinterest

Share This