Typical dilution per round
Pre-Seed / Friends & Family: 5–15% dilution. Often structured as a SAFE or convertible note. Seed: 15–25% dilution. Lead investor plus angels. Post-Seed founder ownership typically 60–75% combined for a two-founder team. Series A: 20–30% dilution. This is where institutional VCs take a meaningful stake and often require a board seat. Series B: 15–25% additional dilution. By Series B, founders who started at 50/50 often own 30–40% combined. Series C and beyond: 10–20% per round. By IPO, founding teams of successful companies typically own 15–25% combined.
Cumulative dilution: the math that surprises founders
A founder who starts at 50% ownership, raises Pre-Seed (10% dilution), Seed (20% dilution), and Series A (25% dilution) ends up at: 50% × 0.90 × 0.80 × 0.75 = 27%. Each round multiplies — it doesn't subtract. This is why early dilution at low valuations is more expensive than it appears: giving away 10% on a $1M valuation and then raising a Series A at $20M means that 10% is now worth $2M of equity you gave away for $100K.
The option pool's hidden dilution
Every round typically requires expanding the option pool for future employee equity. This pool comes from the pre-money cap table — diluting founders before new money arrives. A 10% option pool on a $5M pre-money company means founders absorb 10% dilution before the investor's check clears. Model this explicitly in every term sheet negotiation.
When dilution becomes a problem
The two danger zones: falling below 20% founder ownership before Series B (creates misalignment concerns for future investors and reduces founder incentive) and excessive dilution from early SAFEs and notes that convert at low caps (creating a messy cap table that complicates Series A due diligence). The goal is to maintain enough ownership that the outcome is life-changing regardless of exit size — and enough control to make decisions that serve long-term company value.