Equity & dilution
Typical founder dilution by funding round
A founding team that raises a seed, a Series A and a Series B, refreshing the option pool along the way, commonly ends with 30–45% between them. The compounding does the work: each round scales every earlier percentage down, so a founder who models rounds by subtraction will always overestimate what they keep.
Prepared by Perseids · Published · Updated
A worked path
| Stage | New holders take | Founder A |
|---|---|---|
| Incorporation | — | 50.0% |
| Option pool created | 10% | 45.0% |
| SAFE converts | 8% | 41.4% |
| Seed | 20% | 33.1% |
| Series A | 20% | 26.5% |
| Series B | 18% | 21.7% |
Incorporation
- New holders take
- —
- Founder A
- 50.0%
Option pool created
- New holders take
- 10%
- Founder A
- 45.0%
SAFE converts
- New holders take
- 8%
- Founder A
- 41.4%
Seed
- New holders take
- 20%
- Founder A
- 33.1%
Series A
- New holders take
- 20%
- Founder A
- 26.5%
Series B
- New holders take
- 18%
- Founder A
- 21.7%
Add a pool refresh at Series A and Series B — often 5% each — and the same founder lands near 19.6%. The rounds sold 58% between them; the founder lost more than 30 points, because every later event applies to an already-reduced position.
Why the arithmetic feels worse than expected
- Dilution multiplies rather than adds: 20% then 20% leaves 64%, not 60%.
- Pool refreshes are typically pre-money, so founders fund them.
- Converting SAFEs land in the pre-money share count at the round they convert into.
- Secondary sales by founders reduce the position further, though they create no dilution for others.
What to do with this
- Model the full path before the first priced round, not one round at a time.
- Size each pool from an actual hiring plan.
- Track cumulative convertible caps before adding another SAFE.
- Revisit the model whenever the round size or valuation moves materially.
Prepared by Perseids for general information. It is not legal, tax or investment advice — confirm your specific situation with your advisers.
Frequently asked questions
- What ownership do founders usually have at exit?
- It depends entirely on how many rounds were raised and at what prices. Teams that raise three institutional rounds frequently hold between a fifth and a third collectively at exit; capital-light companies hold considerably more.
- Does dilution stop mattering at some point?
- Percentage matters for control thresholds and consent rights long after it stops being the dominant driver of value. Both should be modelled, not just the number.
Put this into practice with Perseids.
Model your ownership path