Share Answer — Clarity

the startups.com platform about startups.comCheck out the new Startups.com - A Comprehensive Startup University

Categories

Browse Search

Loading...

Question

I'm working on a funding deal with a friendly angel. But they're asking for a lot of equity, to be treated almost as a founder. They're a valuable person to help get a big idea off the ground, but the terms being asked for are not commercial. The turning point seems to be this: in the funding process, when should the founders lose majority ownership of the common stock? Seed, Series A, Series B, etc? Any thoughts on what is commercially reasonable?

Early-stage Startups

Answer

JD Carluccio answered

Read this blog http://calacanis.com/ it explains the different stages compare to the different dilutions.

Also read:

http://www.bothsidesofthetable.com/2011/10/14/understanding-how-dilution-affects-you-at-a-startup/

http://www.bothsidesofthetable.com/2009/08/17/first-round-funding-terms-and-founder-vesting/