Thread by @Adam_Ha_Yes

On average, founders own 15% of their company by the time they IPO.

Some own 75%, others 0%...

What do startup founders who fundraise efficiently do differently?

Here are insights the Founders Collective gleaned after analyzing 71 companies on the public market.
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Founders % of shares at IPO:

Wix 9%
Etsy 0%
Twitter 17%
Pandora 2%
Shopify 17%
HubSpot 14%
Atlassian 75%
Facebook 36%

Here is what makes that interesting...

If a company raised VC, they are worth more at IPO than a bootstrapped company.

Meaning even if you do have less shares, they are (potentially) worth more.

So, the more funding the better?

Not exactly...

The top 20 funded companies raised on average $193M to hit a $2.1B valuation (~9X investor return).

The bottom 20 funded companies raised on average $37M to hit a $1.7B valuation (77X investor return).

What does this mean?

At some point, VC money is inefficient for founders.

The best funded public companies are not outperforming the lowest funded companies.

Why is that?

Mo money, mo problems.

Underfunded companies can outperform overfunded companies for many reasons:

- Better team culture
- Focus on profitability earlier
- Constraints make you resourceful

Remember.

The key is not to raise as much money as possible.

Raise as much as you need (then a lil' more).

But, don't lose sleep over dilution.

There's nothing wrong with having a small slice of a BIG pie.

I'm currently raising a round... of followers 😂

Please follow @Adam_Ha_Yes for more on building and growing startups.

Thanks for reading!