General VC Questions

What is an acceptable equity ask by investors from portfolio companies?

Asked by:
Community Member
Dec 05, 2023
1 answer
Accepted Answer
Dec 05, 2023
What an investor can ask in terms of a percentage of equity or an investment amount depends nearly entirely on variables, so it is impossible to generalize.

Some factors to consider for startup:
  • Geography (US, LatAm, etc.)
  • Market (B2B, B2C, Enterprise, etc.)
  • Sector (Deeptech, Agritech, AI, etc.)
  • Stage (seed, Series A, etc.)
  • Size and type of financing round
  • Runway (cash in bank)

Some factors to consider for investor:
  • Name Brand
  • Investment strategy/stage
  • Typical check size
  • Value-add beyond $$$

Just to contrast, emerging managers of small venture capital funds (say $5M total) may be able to invest $100K into early pre-seed type deals, but may not have leverage to get anything in addition. If we're talking about Sequoia Capital, then they might invest millions at a later stage, get on the startup's board of directors, etc. 

Regardless, it's important for founders to maintain control of the company as long as possible to avoid financing risk and optimize for the best outcome - so percentages are often highly negotiated. Founders should take care to model the capital journey, as there are a number of models available and many variables can affect them as the startup gets built. 

Log In or Sign Up

Please Log In, or Sign Up to participate in the discussion.

Apply to VC Lab Cohort 14

Get full access to Decile Base and the Decile Hub venture platform for free by joining the VC Lab program.

Apply to VC Lab Cohort 14