Equity & shares
When you raise capital, you give up shares. How many, to whom and with what consequences for future rounds is set by your ownership structure. Understanding it protects your position as a founder.
The cap table
The cap table (capitalisation table) lists who owns which shares in the company. It shows ownership before and after each funding round and is the basis of every negotiation with investors.
Understanding dilution
With each new funding round, existing shares are diluted in percentage terms because new shares are issued. That is normal – what matters is that growth increases the value of your smaller stake.
Protecting founder shares
Do not give away too much in early rounds and insist on fair terms. Tools such as vesting and well-considered valuations help you keep your motivation and control across several rounds.
Frequently asked questions
What is dilution?
The percentage reduction of existing shares caused by issuing new shares in a funding round. Your stake falls as a percentage but can rise in value.
How much should I keep as a founder?
There is no fixed rule, but do not give away too much early on. Keeping enough shares secures motivation, control and room for later rounds.
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