How much equity do founders give up in a seed round?

According to Carta, the US equity management platform, the median new funding round at the seed stage took about 20% of the company in the fourth quarter of 2024, and the median Series B took 15%. Those are medians across American deals: the range around them is wide, and the option pool is counted on top.

Dilution is the share of the company that existing owners give up when new shares are issued. It is the number founders ask about first and the one that is hardest to give a single answer to, because it depends on how much is raised, at what valuation, and what else is agreed alongside the new shares.

This guide sets out what the published data actually reports, where the option pool fits, and what is different for a company whose shares sit under a parent outside Europe. It is general information about how rounds work, not investment advice.

How much equity does a seed round usually cost?

According to Carta, the US equity management platform, median dilution on a new seed round was about 20% in the fourth quarter of 2024, and 15% at Series B. Carta also reports that seed dilution has been the most stable of any stage, drifting down from 21.1% two years earlier, while later stages fell by at least two percentage points over the same period.

Two cautions come with that. The sample is American, covering equity rounds raised in dollars by companies based in the United States, and there is no European series published at the same scale. And a median is not a rule: half of all rounds sat above it.

Source: Carta (US), State of Private Markets: Q4 and 2024 in review

Who pays for the option pool?

The existing shareholders, almost always. An option pool is a block of shares set aside for future employees. According to Orrick's review of more than 400 venture and growth financings closed in Europe in 2025, a pool top-up featured in 65% of financings, and where one was agreed it was carved out of the pre-money valuation 82% of the time.

That carve-out means the dilution lands on the owners who were there before the round rather than on the incoming investor.

The same review found that 67% of transactions settled on an unallocated pool of 5% to 10% of the company after completion. So the headline number an investor quotes and the number a founder ends up with are often different, and the gap is usually the pool.

Source: Orrick, Deal Flow 6.0, European Venture Capital Deal Term Review 2025 to 2026, page 25

Why does the number move so much?

Because dilution is an output, not an input. It falls out of how much is raised divided by the valuation after the round, plus whatever pool is agreed. A company that raises less on the same valuation gives up less, and a company that agrees a larger pool gives up more without raising a euro extra.

Three things move it in practice:

• The size of the raise. More money at the same price means a larger share of the company.
• The pool. A top-up taken out of the pre-money valuation lowers the effective price the investor pays.
• What was raised before. Convertible loans and similar instruments from earlier rounds convert into shares at this round, and that conversion is part of the same arithmetic.

What happens to dilution over several rounds?

It compounds. Each round issues new shares, so every earlier holder ends up with a smaller percentage of a company that is, if things go well, worth more. The published medians describe single rounds, not a path, and stringing them together to predict where a founder lands after three rounds produces a number the data does not support.

What can change the picture in the wrong direction is a round priced below the previous one. What that is, and how common it is right now, is in what a down round is. Rounds raised between priced rounds are covered in what a bridge round is, and how long the gap between rounds has become in seed to Series A timing.

What changes when the shares sit under a foreign parent?

The arithmetic is the same, but the owner being diluted is a company rather than a person, and that raises questions a purely domestic round never has to answer. Who owns the technology, the parent or the European company. Which entity employs the engineers. Whether earlier instruments issued by the parent convert into shares in the parent or in the European company.

Investors work through exactly those points before they price anything, which is why the structure decision tends to come before the valuation conversation rather than after it. The checks themselves are in what European investors check in due diligence, and the documents they are done on in what belongs in a data room.

One way to need less of the round is to have spent less of it on things other money pays for. In the Netherlands that usually means the research and development tax credit in what WBSO is and what it is worth, and the reasoning behind that order is in Equity-free money first.

Sources

1. Carta (US), State of Private Markets: Q4 and 2024 in review, checked 22 September 2026
2. Orrick, Deal Flow 6.0, European Venture Capital Deal Term Review 2025 to 2026 (PDF), checked 22 September 2026
3. Orrick, Deal Flow 6.0: 5 things we learned about European tech deal terms in 2025, checked 22 September 2026

Checked on 22 September 2026. This page is general information, not legal, tax or investment advice. Rules change: check the official source, or ask an adviser, before you act on it.