<p class="ql-align-justify">In the last 12 years, mean seed round dilution has dropped from 25% to 12.5%. Series A has dropped from 30% to 20%; Series B from 22.5% to 12%; and Series C from 18% to 11%. Across financing rounds, dilution from capital has fallen by 30-50% in that decade.</p><p class="ql-align-justify"><br></p>

Founders dilution Trend

<h1>The Most Popular Financing Round in 2022 </h1><p>The round extension is the most popular fundraising round today. You won’t find statistics detailing their rise in PitchBook or Crunchbase, but “reopening the last round” or “raising a round extension” precede pitches Startupland today.</p><p>How does an extension impact a company’s cap table on average?</p><img src="https://res.cloudinary.com/dzawgnnlr/image/upload/v1655491433/l0vb6zspi9lnubfpmw0u.png" alt="image" width="700" height="525"><p>Round dilution from VC dollars has been declining for the past decade. These figures exclude employee stock option (ESOP) dilution.</p><p>In the last 12 years, mean seed round dilution has dropped from 25% to 12.5%. Series A has dropped from 30% to 20%; Series B from 22.5% to 12%; and Series C from 18% to 11%. Across financing rounds, dilution from capital has fallen by 30-50% in that decade.</p><p><em>Cumulative Dilution</em></p><table dir="ltr">
<thead dir="ltr">
<tr dir="ltr">
<th dir="ltr">Founded</th>
<th dir="ltr">2010</th>
<th dir="ltr">2015</th>
<th dir="ltr">2022</th>
</tr>
</thead>
<tbody dir="ltr">
<tr dir="ltr">
<td dir="ltr">Seed</td>
<td dir="ltr">25%</td>
<td dir="ltr">18%</td>
<td dir="ltr">12%</td>
</tr>
<tr dir="ltr">
<td dir="ltr">Series A</td>
<td dir="ltr">30%</td>
<td dir="ltr">27%</td>
<td dir="ltr">20%</td>
</tr>
<tr dir="ltr">
<td dir="ltr">Series B</td>
<td dir="ltr">22%</td>
<td dir="ltr">20%</td>
<td dir="ltr">12%</td>
</tr>
<tr dir="ltr">
<td dir="ltr">Series C</td>
<td dir="ltr">18%</td>
<td dir="ltr">18%</td>
<td dir="ltr">12%</td>
</tr>
<tr dir="ltr">
<td dir="ltr">Total</td>
<td dir="ltr">66%</td>
<td dir="ltr">61%</td>
<td dir="ltr">45%</td>
</tr>
</tbody>
</table><p>Here’s a table of cumulative dilution for a hypothetical startup raising 4 rounds in one year. It’s not the implied ownership of preferred shareholders at the end of these raises. The calculation doesn’t include ESOP expansion, full investor participation in pro-rata, and other changes to the cap table.</p><p>Today, founders sell less of their companies to achieve fundraising milestones today than at any in the last decade - a 30% drop in 12 years.</p><p>A round extension that sells another 15% of the company leaves a modern founding team with more ownership than its older brothers founded five or ten years ago.</p>

moneyandinvestments

Money & Investments

startup

Startups

<p>The round extension is the most popular fundraising round today. You won’t find statistics detailing their rise in PitchBook or Crunchbase, but “reopening the last round” or “raising a round extension” precede pitches Startupland today. </p>

<p>How does an extension impact a company’s cap table on average? </p>

<p>Round dilution from VC dollars has been declining for the past decade. These figures exclude employee stock option (ESOP) dilution. </p>

<p>In the last 12 years, mean seed round dilution has dropped from 25% to 12.5%. Series A has dropped from 30% to 20%; Series B from 22.5% to 12%; and Series C from 18% to 11%. Across financing rounds, dilution from capital has fallen by 30-50% in that decade. </p>

<p>Here’s a table of cumulative dilution for a hypothetical startup raising 4 rounds in one year. It’s not the implied ownership of preferred shareholders at the end of these raises. The calculation doesn’t include ESOP expansion, full investor participation in pro-rata, and other changes to the cap table. </p>

<p>Today, founders sell less of their companies to achieve fundraising milestones today than at any in the last decade - a 30% drop in 12 years. </p>

<p>A round extension that sells another 15% of the company leaves a modern founding team with more ownership than its older brothers founded five or ten years ago. </p>

The Most Popular Financing Round in 2022 by @ttunguz

Founders dilution Trend

Cosmin O's ideas are part of this journey:

Related collections

Similar ideas