TL;DR - Founders should not forget their purpose when fundraising through equity.
Helpfulness - 4
Topic Tags - Dilution, equity funding, founder advice, change in VC
- How much money should a founder raise from equity?
- Early fundraising used to be hard, not so much anymore. Lots of money looking to be invested in private companies (tech), leading to higher evaluations and funds raised.
- “Choosing to raise less helps protect their ownership more than negotiating valuation does.” Founders should only raise what they need each round, selling 10-15% equity for seed and 15-25% for series A. Combined Founders should try to sell less than 30% of their company.
- Raising lots of money is not a success, instead, it may lead to a company’s failure.