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.
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

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!

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More from @Adam_Ha_Yes

2 Jun
Startups are a zoo.

Which startup animal are you?
🦌 The Gazelle

$100m valuation and revenue of $15m to $50m.

Gazelle's are quick to scale revenue.

Even $1m+ and 20% YoY revenue growth will grant you gazelle status.

Some consider the Gazelle to be Africa's Unicorn status.
🦓 The Zebra

Zebras have two stripes because they seek profit and purpose.

Zebra's don't look for 'growth at all costs' but instead create sustainable businesses.

They form close collaborations with other Zebras like @Zebras_Unite
Read 10 tweets
27 May
Your Mom gave you one rule... don't get in a strangers car.

But you did, and now Uber is a $95B business.

If you gave them $5k after seeing this original pitch deck, you would now be worth $24m+👇
1/ Question the status quo

Before Uber, no one questioned taking a cab.

It's just what you did.

Standing on the side of the road with your arm out was normal.

Now it seems a bit... silly?

Find industries where we're still standing on the side of the road.
2/ New tech enables old ideas

Uber wasn't the first ride-sharing app.

The others were too early.

If there wasn't a rise in smart phones and location based services, then Uber wouldn't be possible.

Find opportunities where there's emerging adoption (like VR)
Read 11 tweets
25 May
Step aside Miami.

Don't sleep on Africas startup scene.
🧵 Image
In 2020, Tunisia implemented a "Startup Act".

If you start a company there you get:
- State salary for up to three founders during 1st year of operations
- One-year leave period to start a company with right to return to your old job
- And generous tax-breaks

Ummm, yes please.
The startup ecosystem in Africa is fertile soil.

In 2020, 397 companies raised a collective $701 million. Which was 42.7% higher than 2019.

Companies from the "big four" received the majority of funding.
- Kenya
- Nigeria
- South Africa
- Egypt
Read 7 tweets
20 May
Please stop motivating me.

Here's why you shouldn't want to be motivated either.

This is the motivational industry in a nutshell...
I log onto YouTube and get suggested a video called "10 minutes of motivation that will change your life"

Sweet, I want to change my life... let's watch.
The video starts out great.

Woah, is that Will Smith in the Pursuit of Happyness?

The narrator tells me that I have limitless potential.
Read 23 tweets
18 May
You can launch your own Airbnb for $500.

Or Tinder for $450... and Uber for $2,000

"App clones" are popping up everywhere.

Here's why the "app clone" market is insane:
Imagine you have an idea that is Uber for X or Airbnb for Y.

Now you want to build it, but aren't technical.

You can:
A) Pay a freelancer or dev shop $15,000+
B) Find a technical co-founder
C) Spend 2+ learning how to code
D) Use an app clone
Thats why companies like AppDupe are getting 100,000 visitors a month.

They build "clones" of the most popular sites and give you a white-labeled solution.

Their sell to founders is...
- Launch quickly
- In-house customization
- Save $ on development

But here's the problem...
Read 9 tweets
13 May
What's the most important marketing metric?


No. It's viral coefficients.

Your viral coefficient determines if your product will go viral or not.

Here's how to calculate yours and optimize it
Take your...

(Average invites sent per user X your conversion rate) = your viral coefficient

(5 invites x 30% conversion rate) = 1.5 new users

Your final number represents how many people one member brings in.

If the number is over 1, then your product will go viral.
Time for back of the napkin math

10 users would bring in 15 new users.
Who would bring in...
4,098,061 new users
Read 12 tweets

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