💸 How Much Equity to Give Away in Seed Round? 💸
A complete guide to answering this crucial question.
As a founder, you naturally want to give away as little equity as possible for as big of a check as possible.
Investors want the exact opposite.
How much should you give?
→ A general rule of thumb is giving away between 10-20% equity during a seed round.
How much funding should you get?
→ Seed rounds range from $250,000 to $1 million.
Please note that these numbers vary on a case-by-case basis.
It is very important to put yourself in the investor’s shoes:
> About 90% of all startups fail within the first year
> Only 20-30% of seeded companies go to series-A
> Thereafter, the follow-on rate is about 50% for each stage
When investors are investing early on you, they are taking a BIG RISK and need to be rewarded accordingly.
However, as a founder, you also need to be careful with equity – the more you give early on, the less you’ll have to offer to other investors during bigger rounds.
What is your general rule of thumb when it comes to giving equity during the seed round? 💬
Source: Maximilian Fleitmann
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