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How much equity will venture capitalists want in my start-up?

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Internet in Business mentor Bradley Feld responds to the following question from an inc.com visitor:
What is the typical composition of a start-up's stock distribution betweenfounders and employees and venture capitalists?

Bradley Feld responds:The initial split of stock among venture capitalists, founders, and employees can vary dramatically based on several factors. These may include but not be limited to:

  • The experience of the founders
  • The progress of the company
  • The amount of money the founders are willing to invest in the company
  • The quality and development of the company's marketplace

While there are no definitive numbers, in my opinion you should expect that most VCs will be interested in buying between 20% and 40% of the company inthe first round.

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Interested in learning more about sharing company equity? Check out the following inc.com articles:

"Know Your Options"
"Motherhood, Apple Pie, and Stock Options"
"CEO's Notebook: Stock Options and Equity"




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