5% ownership is probably the most common final stake for VC funded startup founders

💸 You think this is crazy low but ~5% ownership probably the most common final % most VC funded startups will have when they work out, especially when you have a co-founder

Raising money is not free, people don't give you money out of charity, they buy a little slice of your company every time they invest, so in every funding round you sell a share of your company's ownership for money, that money you use then to grow more, in the hope that your part becomes more than the ownership you just gave away

Median ownership for single founders (via @cartainc):

Seed: ~56%
Series A: ~36%
Series B: ~23.5%
Series C: ~16.5%
Series D: ~10%
Series E: <10%

Now if you have one co-founder (most startups!):

Seed: ~28%
Series A: ~18%
Series B: ~11.75%
Series C: ~8.25%
Series D: ~5%
Series E: <5%

What if you're one of 4 co-founders:

Seed: ~14%
Series A: ~9%
Series B: ~5.875%
Series C: ~4.125%
Series D: ~2.5%
Series E: <2.5%

Now imagine you get acquired after one of these funding rounds for $1,000,000,000 ($1 billion is a lot!), how much are you left with?

Money made with $1B sale for single founders:

Seed: ~$560 million
Series A: ~$360 million
Series B: ~$235 million
Series C: ~$165 million
Series D: ~$100 million
Series E: <$100 million

Now if you have one co-founder (most startups!):

Seed: ~$280 million
Series A: ~$180 million
Series B: ~$117.5 million
Series C: ~$82.5 million
Series D: ~$50 million
Series E: <$50 million

What if you're one of 4 co-founders:

Seed: ~$140 million
Series A: ~$90 million
Series B: ~$59 million
Series C: ~$41 million
Series D: ~$25 million
Series E: <$25 million

But let's be more realistic, the median acquisition value for a VC-backed startup sits at approximately $71 million:

For single founders:

Seed: ~$39.8 million
Series A: ~$25.6 million
Series B: ~$16.7 million
Series C: ~$11.7 million
Series D: ~$7.1 million
Series E: <$7.1 million

Now if you have one co-founder (most startups):

Seed: ~$19.9 million
Series A: ~$12.8 million
Series B: ~$8.3 million
Series C: ~$5.9 million
Series D: ~$3.55 million
Series E: <$3.55 million

What if you're one of 4 co-founders:

Seed: ~$9.95 million
Series A: ~$6.4 million
Series B: ~$4.2 million
Series C: ~$2.9 million
Series D: ~$1.8 million
Series E: <$1.8 million

Okay last one (this post is getting too long 😊), we know 1) the median time of acquisition is around Series A (quite early actually), and 2) we know the median acquisition value is $71M, so now we can tell you the median expected outcome for a startup that gets acquired:

Single founders: ~$25.6 million
One co-founder: ~$12.8 million
One of 4 co-founders: ~$6.4 million

Getting acquired itself is a remarkable event though as most startups are by definition doomed to fail, only ~15% of startups ever get acquired, so the expected outcome with probability included is:

Single founder: ~$3.84 million
One of two co-founders: ~$1.92 million
One of four co-founders: ~$960,000

P.S. we did not include taxes and liquidation preferences, the investors may receive their preference before common shareholders receive anything, meaning founders receive even less, but we also didn't include taking money off the table in earlier rounds by founders to be fair, so they balance each other out a bit

Not saying this is bad btw, it's just how the VC game works but good to write it out and be aware of how it works

VC-backed startups shoot for the moon, it's one of the few ways you can have a crazy big payout and become an actual billionaire which is very rare as a bootstrapped founder with your own money!

Originally posted on X