How Much Equity Should You Give Seed Investors?

There's no correct percentage. But there is a sensible range, a way to work out where in that range you should land, and a handful of decisions that quietly cost founders more equity than the headline number suggests.

This guide covers all three. It assumes you're raising a seed round, but the same logic applies at pre-seed and Series A.

The usual range

Across most venture-backed markets, seed rounds commonly involve selling somewhere around 15% to 25% of the company. Pre-seed rounds tend to be smaller, often 5% to 15%. Series A rounds are commonly 15% to 25% again.

These aren't rules. They reflect what investors need to make their fund economics work and what founders can afford to give up while keeping enough ownership to stay motivated through later rounds. A company with exceptional traction might sell 10% at seed. One with a hard technical problem and no revenue might need to sell 30%.

Why investors want a certain ownership

Understanding the other side helps you negotiate. Venture funds make most of their returns from a small number of big winners. For a fund to return its capital several times over, each potential winner needs to produce a large return, which means owning a meaningful slice when the company exits.

A seed fund leading your round will often target 10% to 15% ownership on its own. If you try to sell only 8% in total, the lead may walk away, not because they don't like you, but because the numbers don't work for their fund. Knowing this lets you have a straightforward conversation about structure rather than haggling blindly.

Work it out from the bottom up

The best way to decide how much equity to sell is to start with how much money you need, not with a percentage.

Step 1: Define the milestones for your next round

What do you need to prove to raise a Series A on good terms? For a B2B software company that might be a revenue figure, a growth rate and strong net retention. For a marketplace, it might be transaction volume and repeat usage. Read our guide on what VCs look for in a Series A to set realistic targets.

Step 2: Cost the plan

Build a month-by-month budget to reach those milestones. Include salaries, tools, marketing, legal and a buffer. Most founders underestimate hiring time and sales cycles, so add 20% to 30% on top.

Step 3: Add runway margin

You want to start raising the next round with six or more months of cash left, not two. So if your plan takes 18 months, raise for about 24.

Step 4: Divide by a fair valuation

Now you have an amount. Divide it by a post-money valuation that's realistic for your traction, sector and geography. That gives you the percentage.

The hidden dilution: option pools and convertibles

The percentage you agree with your seed investors isn't the full dilution you'll experience. Two other things usually happen in the same round:

• Option pool top-up. Investors often ask for a 10% to 15% unallocated pool post-money, created before their money comes in. If you have a small pool now, the top-up can cost you several points.
• Conversion of earlier SAFEs or notes. If you raised a pre-seed on SAFEs, they convert at the seed and dilute you, not the new investors.

Put together, a founder who "sold 20%" at seed might see their own fully diluted ownership fall by 30% or more in relative terms. Our post-money valuation guide shows the full calculation. Always run a pro forma model before you sign.

How dilution compounds across rounds

Each round dilutes everyone who came before. It's worth seeing what a fairly typical path looks like.

Real outcomes vary a lot, but the pattern matters: founders who give away too much early often find themselves below 30% combined by Series B, which can create problems with motivation and with later investors who want founders to remain well-incentivised.

When selling more makes sense

Selling more equity isn't automatically bad. It can be the right call when:

• the extra money meaningfully reduces the risk of running out of cash,
• it lets you hit milestones that put you in a much stronger position for the next round,
• it brings in an investor who will genuinely change your trajectory, or
• the market for fundraising is tightening and the next round may be harder to raise.

A smaller slice of a company that survives is worth more than a larger slice of one that runs out of money.

When to push back

Resist selling more when:

• the extra money would sit in the bank without a clear plan,
• an investor is using a tight market to push dilution well beyond the usual range,
• the pool request is far larger than your hiring plan, or
• a single investor wants a share that would make future rounds awkward.

Advisers, early employees and cofounders

Equity also goes to people, not just investors. Some practical norms:

• Advisers: commonly a fraction of a percent each, vesting over one to two years. Be selective.
• Early employees: the first few hires before or around seed often receive larger grants than later employees because they're taking more risk.
• Late cofounders: someone joining after the company has raised money usually receives less than an original cofounder. Use vesting either way.

All of these come from the option pool or from founder shares, so they belong in your planning too.

A simple decision checklist

1. Have you costed the plan to reach your next round's milestones, with a buffer?
2. Does the valuation reflect comparable rounds, not wishful thinking?
3. Have you modelled the pool top-up and convertible conversions?
4. Will founders still hold a healthy combined stake after Series A?
5. Is the lead investor's target ownership compatible with your round size?

If you can answer yes to all five, the percentage you land on is probably fine, whatever it is.

How the round's structure affects dilution

The same amount of money can cost you different amounts of equity depending on how the round is put together. A few structural choices are worth thinking through before you start conversations.

One priced round vs a string of SAFEs

Raising a single priced seed round fixes everyone's ownership at once. Raising the same total across three or four post-money SAFEs over 18 months often costs founders more, because each new SAFE dilutes the founders but leaves earlier SAFE holders' percentages intact. If you've already raised on SAFEs, keep a running model of the total and set a ceiling before you convert to a priced round.

Rolling closes

Many seed rounds close in stages, with the first investors wiring money before the round is complete. That's fine, but agree up front on a maximum round size. Rounds that keep growing because "one more investor wants in" can quietly push dilution from 18% to 25%.

Strategic investors

A corporate investor may offer a good valuation in exchange for commercial rights, such as a right of first refusal on an acquisition or exclusive distribution. Those rights can cost far more than a few points of equity because they put off other buyers and investors. Price them in when comparing offers.

Secondary sales

In hot markets, some founders sell a small amount of their own shares as part of a round. That doesn't dilute the company, but it does reduce the founder's stake. It can be sensible for personal financial stability, but most seed investors prefer founders to keep their full holdings at this stage.

Talking about equity with investors

Founders often feel awkward discussing percentages directly. You don't need to. A straightforward approach works best: explain how much you're raising and why, share the plan the money funds, and ask the investor what ownership they typically target. If their target and your numbers don't fit, discuss whether the round size, the valuation or the mix of investors should change. Most experienced investors respect founders who understand their own dilution and can talk about it calmly.