How Much Equity Should Founders Give Up at Seed and Series A?
- Awake Partners
- Nov 20
- 3 min read
TL;DR — Founder Equity & Dilution
• Founders typically give up 10–20% equity at Seed and 20–30% at Series A.
• Dilution varies based on round size, valuation, and investor type.
• Avoid giving away too much early — it limits future flexibility.
• Strategic negotiation protects founder ownership long-term.
One of the toughest questions for founders is how much equity to give away in early fundraising. Seed and Series A rounds often set the long-term ownership structure. This article breaks down average dilution benchmarks, investor expectations, and strategies to protect founder control.
Why Equity Dilution Matters for Founders
Equity is the most valuable resource a founder has. It represents both ownership and long-term incentive. While raising capital is often necessary to grow, giving up too much equity too early can undermine founder control and future flexibility.
Investors typically want enough equity to justify their risk while still leaving founders motivated. The art of fundraising lies in finding the right balance between investor stake and founder ownership.
Typical Equity Ranges at Seed Stage
At the Seed stage, investors expect significant risk.
Startups often have limited traction, an early product, and small teams. In exchange for taking this risk, Seed investors usually receive between 10–20% equity.
Smaller Seed rounds (e.g., €500K) may result in ~10% dilution.
Larger Seed rounds (€1–2M) can push dilution closer to 20%.
📌 Example: If a startup raises €1M at a €5M pre-money valuation, the investor gets 16.7% equity post-round.
👉 Benchmark: Y Combinator’s dilution guide highlights that founders who give away more than 20% at Seed often face difficulties in later rounds.
Typical Equity Ranges at Series A Stage
By Series A, investors expect product-market fit and strong traction. The round size is larger, often between €2–10M, and valuations typically range from €10–40M.
VCs at Series A generally target 20–30% ownership.
Founders who raised conservatively at Seed may retain 60–70% after Series A.
If over-diluted at Seed, founders may drop below 50% post-Series A, which risks losing control.
👉 Data from Carta’s equity benchmarks confirms this trend: the median Series A dilution is ~25%.
Factors That Influence Equity Negotiations
Not all fundraising deals are equal. Equity dilution depends on several variables:
Valuation — higher valuation = lower dilution.
Investor type — angels may take less, VCs more.
Round size — larger rounds mean higher dilution.
Market conditions — bull markets push valuations up, downturns push them down.
Negotiation power — founders with traction and multiple investor options negotiate better terms.
Common Mistakes to Avoid in Equity Deals
Over-diluting at Seed — giving away 25–30% too early creates problems for later rounds.
Ignoring option pools — new hires will need stock options, which further dilutes founders.
Underestimating future rounds — leaving too little equity for Series B and beyond.
Accepting money from the wrong investors — alignment matters as much as capital.
👉 As TechCrunch often notes, poorly structured early rounds can “haunt founders” later in their fundraising journey.
How Founders Can Protect Their Ownership
Founders can adopt several strategies to avoid over-dilution:
Raise what you need, not the maximum — larger rounds aren’t always better.
Negotiate for fair valuations — grounded in traction and market comparables.
Structure option pools carefully — don’t let investors force oversized pools.
Choose investors strategically — smart money can justify slightly higher dilution.
Ultimately, equity is about control and motivation. Founders who plan their ownership roadmap across Seed, Series A, and Series B are more likely to maintain influence.
Key Takeaways
Equity dilution is inevitable but manageable.
Benchmarks: 10–20% at Seed, 20–30% at Series A.
Avoid early over-dilution — think 2–3 rounds ahead.
Investors fund momentum, but founders must protect long-term control.
👉 Need guidance on negotiating equity?
Awake Partners helps founders structure fair fundraising deals — from valuation to term sheet negotiation.
Q&A — Quick Answers for Founders
Q: How much equity do founders give up at Seed?
A: Usually 10–20%, depending on valuation and round size.
Q: How much equity do VCs take at Series A?
A: Around 20–30%, with founders often diluted to 60–70% ownership post-A.
Q: Why does equity dilution matter?
A: Excessive dilution reduces founder control, incentive, and long-term value.
