2. ABOUT THIS REPORT
• Capshare offers a cloud-based cap table and electronic stock
management system
• This report offers benchmark data and aggregated analysis for
startup executives and investors
• No personal or company-identifiable data is available in this report
• Capshare has over 5,000 active companies, law firms, and investors
using our platform
3. Common +
Convertibles
25%
50%
75%
0%
Common Only
100%
Series
Seed
Series B Series CSeries A Series D+
E MP LOY E E V S . I N V E S TO R O W N E R S H I P BY S TA G E
EMPLOYEE VS. INVESTOR EQUITY BY STAGE
Employees retain a majority ownership stake in a typical investor-backed company
until the Series B stage. However, company founders still often lose the ability to
control a company by themselves after a Series A.
100% 100%
75%
25%
40%
68%
58%55%
60%
45% 42%
32%
Employee Ownership Investor Ownership
4. EMPLOYEE DILUTION BY STAGE
If you use all non-preferred shares as a proxy for employee ownership percentage,
you can see that employee ownership “decays” from 100% to around 45% by the
Series B stage.
Common +
Convertibles
25%
50%
75%
100%
0%
Common
Only
100%100%
75%
NO N- PRE FE RR ED S TO CK OWNERSHI P % BY STAG E
Series
Seed
Series A Series B Series C
Median Value
60%
45%
32%
42%
Series D+
Mean Value
5. EMPLOYEE OWNERSHIP FORMULA
For the mathematically inclined, employee ownership almost perfectly fits a
logarithmic curve with each new round of funding. The “Employee Ownership
Formula” is: Employee Ownership = -0.38 * ln ( Number of Rounds of Funding) + 1.
E MP LOY E E O W N E R S H I P T R E N D L I N E BY S TA G E
28%
55%
83%
110%
0%
Common Only Series SEED Series CSeries BSeries A
100%
32%
45%
75%
Series D+
60%
42%
Log Trendline
y = -0.378ln(x) + 1.0047
R
2
= 0.9953
Median Value
6. FOUNDER OWNERSHIP BY STAGE
We can define “founder ownership” as all common and restricted common stock.
Founder ownership decreases from 94% to 26% by the Series B stage. It could
actually be a little lower in later stages as optionees convert options to common
stock.
Common +
Convertibles
25%
50%
75%
100%
0%
Common
Only
C O MMO N + R E S T R I CT E D C O MMO N O W N E R S H I P BY S TA G E
Series
Seed
Series A Series B Series C Series D+
Median Value Mean Value
94%
90%
61%
45%
26%
25%
11%
7. $210.8M
$75.1M
$38.5M
$25.3M
$10.9M
$0.9M$1.1M
$55,000,000
$110,000,000
$165,000,000
$220,000,000
PRE-MONEY VALUATIONS BY STAGE
The distribution of pre-money valuations has a long-tail skewing toward a few
companies with really high valuations so median values are significantly lower than
mean values. Pre-money valuations grow rapidly in a company’s later stages.
$0
Common
Only
Common +
Convertibles
Series Seed Series A Series B Series C Series D+
ME A N A ND ME D I A N P R E - MO NE Y VA LUA TI O N BY S TA G E
Mean Post-Money Median Post-Money
8. Exp. Trendline
y = 373135e
0.9232x
R
2
= 0.93436
PRE-MONEY VALUATIONS TRENDLINE
Mean pre-money valuations increase exponentially as companies progress to later
stages.
$55,000,000
$110,000,000
$165,000,000
$0
Common
Only
Common +
Convertibles
Series Seed Series A Series B Series C Series D+
Mean Pre-Money
$220,000,000
P R E - MO N E Y VA LUA TI O N TR E N D L I N E BY S TA G E
$210.8M
$75.1M
$38.5M
$25.3M
$10.9M
$0.9M$1.1M
9. POST-MONEY VALUATIONS BY STAGE
Mean and median post-money valuations diverge increasingly at later stages. This
would indicate that the values of a subset of very highly valued companies pulls the
average up but most companies don’t achieve such high valuations.
ME A N A ND ME D I A N P O S T- MO NE Y VA LUA TI O N BY S TA G E
$60,000,000
$120,000,000
$180,000,000
$0
Common
Only
Common +
Convertibles
Series Seed Series A Series B Series C Series D+
Mean Post-Money Median Post-Money
$238.8M
$92.2M
$50.7M
$34.5M
$13.2M
$3.7M$2.3M
$240,000,000
10. 7%
14%
21%
0%
28%
Series Seed Series A Series B Series C Series D+
ME D I A N E MP LOYE E D I LUTI O N BY S TA G E I N P E R C E NTA G E P O I NTS
15%
22% 22%
17%
15%
“TYPICAL” DILUTION RATES
Executives should expect dilution of between 15-25% in nearly any round no matter
the stage. However, dilution does appear to be smaller at the earliest and latest
stages of a company’s life. Dilution peaks in the Series A and B.
11. N UMB ER OF S H ARE HOLDERS BY STAG E
55
110
165
220
0
Common
Only
Common +
Convertibles
Series Seed Series A Series B Series C
17
30
38
52
99
Series D+
191
222
NUMBER OR SHAREHOLDERS BY STAGE
Number of shareholders often correlates with headcount but some companies offer
equity to a broader range of employees. Here is the median number of equity
shareholders at all stages.
12. 10%
20%
30%
0%
Common Only Common + Convertibles
40%
Series SEED Series BSeries A Series C Series D+
I S S UE D A ND UNI S S UE D O P TI O NS BY S TA G E
10%
13%
15%
13% 14% 14%
15%
Issued
OPTION POOL PERCENTAGE BY STAGE
The option pool typically stays between 13-15% at any stage, if you include
authorized but unissued options.
Unissued
13. USAGE OF EQUITY INSTRUMENTS BY STAGE
Companies almost all use common, preferred, ISO, and NSO equity. Companies also
use RSAs, though somewhat less frequently. RSUs, SARs, and SPRs appear much
less frequently and typically in later-stage companies.
U SA G E OF E QUI T Y I N STRUMENTS BY STAG E
C o m m o n
P r e f e r r e d
R S A
R S U
I S O
N SO
S A R
S P R
25% 50%
C o m m o n O n l y
C o m m o n + C o n ve r t i b l e
S e r i e s S E E D
S e r i e s A
S e r i e s B
S e r i e s C
S e r i e s D +
0% 75% 100%
14. RESTRICTED STOCK AWARDS (RSA)
On average, RSAs represent a large ownership stake across a small number of
shareholders. This is because RSAs are frequently used by founders to vest each other.
8%
15%
23%
0%
Common
Only
Common +
Convertibles
2.5
3.3
30%
1.8
3.5
5.3
7.0
Series Seed Series A Series B Series C Series D+
2.2
3.5
3.3
3.7
6.4
RSA Shareholders
R E S T R I CT E D S TO C K A WA R D S ( R S A s) BY S TA G E
14%
28%
11%
10%
3% 4%
1%
RSA Ownership %
15. WATERFALL ANALYSIS
• Capshare pioneered software-based waterfall analysis for
private companies
• Capshare’s waterfall analysis takes into account:
- Liquidation preferences
- Participation rights and caps
- Conversion rates
-Cumulative dividends
- PIK dividends
- Warrants with exercise prices less than their liquidation
preference per share
• Executives and shareholders can see a complete breakdown
of equity proceeds in any hypothetical exit scenario
THE FOLLOWI NG S LI D ES P ROVI D E
A G G R E G A T E WA T E R FA L L A N A LYS I S DA TA
16. DOWNLOAD THE FULL REPORT
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• The full report contains:
- Employee vs investor equity splits by company stage
- Founder ownership by company stage
- Average employee stock ownership of a company by stage
- Mean and median pre- and post-money valuations by stage
- Benchmark founder dilution rates by stage
- Option pool size benchmarks by stage
- For the first time ever, typical liquidity (or waterfall) values for
common and preferred shareholders
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