How much Stakes should Founders Retain over Multiple Rounds?
- Kartikeyan Khator
- 5 days ago
- 2 min read
Now that you know about when to raise and how much to raise, the next natural question is how much stakes should you dilute or retain for that matter. Your intuitive mind might say that this is an outcome of how much you are raising and your valuation, but the truth is that more often than not it is the other way round - valuation is the outcome of how much you raise and how much you dilute. Therefore, it is imperative for founders to decide how much stakes they must retain at the end of the round, keeping in mind their future fundraise plans.
The Benchmarks
Here’s what we found out by churning the data of India’s Unicorns:
Seed Stage – Founders were collectively left with a median ownership stake of 77% at the end of the seed round. Notably, this stake is after both pre-seed and seed round of funding, therefore, founders should look at cumulative dilution of 23% in pre-seed and seed rounds. Outliers: Founders of Delhivery, Navi and boAt retained over 90% stakes at the end of their seed stage.
Series A – At the end of Series A round, founders retained a median ownership stake of 56%.
Series B – At the end of Series B round, founders retained less than 50% of their ownership stake, landing at a median of 40%, diluting an additional 16% from the last round.
Series C – At the end of Series C round founders were left with a median ownership stake of 31%. Outliers: Founders of boAt, Pristyn Care and Upstox continued to own a majority stake (i.e. >50%) at the end of their Series C round.
Thumb Rule:
Retain at least 51% of your company at Series A (post funding).
Keep in mind:
Stake dilution is calculated after considering notional dilution due to ESOPs and other convertible instruments.
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This article featured in our Founder's Playbook which answers questions around startup fundraising - when, how much, at what price, and more. You can access the Playbook here.
