Thread by @harshjain85

Having gone thru many rounds while creating an $8 Billion co (@dreamsportsHQ), thought I’d share some funding/dilution planning math for #founders #entrepreneurs to try to own 30% (yes!!!) of their company while creating more Indian 🦄s
Thread below 🧵

Startup:

Founders - 100%
ESOPs - 0%
Investors - 0%
Solve a large problem you're SUPER passionate about

Seed round 🔥
Raise $2M @ $8M pre, $10M post
Founders - 65%
ESOPs - 15% (newly created)
Investors - 20%
Valuation basis - Team (Founders) + TAM (Total Addressable Market)

Series A 🔥🔥
Raise $10M @ $40M pre, $50M post
Founders - 52%
ESOPs - 12%
Investors - 36%
Valuation basis - PMF (Product Market Fit = increasing user adoption with high organic retention)

Series B 🔥🔥🔥
Raise $25M @ $125M pre, $150M post
Founders - 43%
ESOPs - 10%
Investors - 47%
Valuation basis - Exponential Growth + good Contribution Margins

Series C 🚀
Raise $75M @ $350M pre, $425M post
Founders - 36%
ESOPs - 8%
Investors - 56%
Valuation basis - Exponential Growth + good Gross Margins + path to Break Even

Series D 🚀🏆
Raise $150M @ $850M pre, $1B post
Founders - 30%
ESOPs - 7%
Investors - 63%
Valuation basis - High Growth + P&L Break Even + Good Moats + Expansion plans beyond core biz

PS - all this planning assumes that it’s a company operating in a large market, run by great founders, and hitting their projections pretty consistently. Also assuming that ESOPs are given thoughtfully to make the original 15% last till $1B val

Founders should raise enough $ for a 24 month runway & start raising again in 12 months if needed. Usually rounds will be 18 months apart, so if everything goes well founders can create a self-sustaining unicorn in 10 years. It only takes a decade to build an overnight success!

Of course a founder’s life is not easy and sh*t keeps happening, so you might have to raise more money and/or have lower valuations, but I hope that if not 30% then founders use this to plan to at least get to 25% when they become a unicorn!

Calculations screenshot attached: