Founders often ask me, “If I own X% after my first investment round, how much will I be diluted through financings until exit?”. There are rules of thumb but there is no good data about what happens to common stock. So, why not survey entrepreneurs and find out? I’ve set up a simple survey using Google Forms. Share your story. I’ll publish the summary data.
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hi simeon
this is a great thing to do – i look forward to your data
one note – your survey only allows for companies with exits. but to get a better picture of the “market” we should also look at venture funded companies which are still pre-exit. true, founders and common shareholders may end up with further dilution, but knowing how much dilution they have already taken to get to wherever they are would be very worthwhile
Pre-exit would be interesting, indeed – but scenarios vary so much, more questions need to be asked and this should better be left for a deeper, comprehensive survey.
Put 2 past companies but they may be anomalies (by size, sector and geography) and may even distort results if the sample is small – consider excluding.
Final results will be still very interesting –
V.
Steve, it’s very hard to pull any solid data out of pre-exit companies as they are work in progress. That’s why I’m focused on where founders end up.
Vladimir, any and all data is valuable. Thanks for sharing.
Hi Simeon, did you ever post the ‘founder’s dilution’ table? If so, where can we find it?
Unfortunately, the responses weren’t sufficient to create a good data set. I decided not to publish data that could be more wrong than right. New entries are trickling in, though, so hopefully there will be something to report in 2010.
any updates on this?
Not enough data to make the analysis meaningful and cap tables have changed significantly over the past few years with the meteoric rise of capped convertible notes. It now takes much longer to understand exactly how much founders will be diluted.
Noted, but can’t you post with some explicitly stated assumptions and caveats? No response is less helpful than something even directionally accurate.