There's no universal answer for how much equity to give investors, but there are strong market norms. Understanding them helps you negotiate from a position of knowledge rather than guessing.
Market norms by stage
Pre-seed / Friends & Family ($100k–$500k) Typical dilution: 5–15% Valuation range: $1M–$5M pre-money Investors: angels, friends, family, micro-VCs
Seed ($500k–$3M) Typical dilution: 15–25% Valuation range: $3M–$10M pre-money Investors: seed-stage VCs, angels, accelerators
Series A ($3M–$15M) Typical dilution: 20–30% Valuation range: $10M–$30M pre-money Investors: institutional VCs (e.g., Sequoia, Andreessen Horowitz, Benchmark)
Series B ($10M–$40M) Typical dilution: 15–25% Valuation range: $30M–$100M pre-money Investors: growth equity, institutional VCs
What investors actually need
Investors typically seek 15–25% ownership in each round. The reason is portfolio construction: if a VC fund invests in 30 companies hoping 3 return 10×, each investment needs to have meaningful ownership to generate fund returns.
A $100M fund making $5M investments at 20% ownership owns $20M of a company at exit if it's worth $100M — a 4× return on that investment. If ownership is only 10%, same company returns $10M (2×). Fund math matters.
How to negotiate higher valuation
Traction: The strongest negotiating position is growth. MoM growth of 15–20%, strong NPS, and paying customers give you leverage.
Competing term sheets: Multiple investors bidding creates price competition. Even a soft indication of interest from a second investor improves your position.
Strategic value: Investors with specific expertise (your industry, your GTM) often accept lower ownership for the privilege of getting in.
Staged milestones: SAFEs and convertible notes defer valuation to the next priced round. If you're pre-revenue, a SAFE with a reasonable valuation cap avoids negotiating a definitive valuation before you have traction data.
Cumulative dilution model
Founders who raise $500k at 10%, then $2M at 20%, then $10M at 25%:
After pre-seed: 90% × 100% = 90% After seed: 90% × 80% = 72% After Series A: 72% × 75% = 54%
With a 10% employee option pool created at each round, founders typically retain 35–45% at Series A. This is normal and healthy.
Model your specific round at the Equity Dilution Calculator.