HOW STARTUP FUNDING WORKS BY ANNA VITAL
A HYPOTHETICAL STARTUP GOES FROM IDEA TO IPO
IPO (Initial Public Offering)
how much you get it
at $2.6 billion valuation
100% OF NOTHING IS A LOT LESS THAN 17% OF A BIG COMPANY...
at $4 million valuation SERIES A
at $1 million valuation SEED ROUND
FAMILY AND FRIENDS
some more series of funding
SPLITTING THE PIE
what you give
founder 1 50%
founder 2 50%
founder 1 37.5%
founder 2 37.5%
option pool 20%
Stock set aside for future employees.
founder 1 31.2%
founder 2 31.2%
option pool 16.7%
founder 1 19.2%
founder 2 19.2%
first employee 1.8%
option pool 13.5%
founder 1 17.6%
founder 2 17.6%
first employee 1.7%
option pool 12.45%
what everyone does
start the company.
does half of the work.
FRIENDS AND FAMILY
invests before anyone else at the lowest price.
has at least $1,000,000 or $200,000 annually - is an accredited investor. Invests her own money.
persuades other people to put money in his fund. Invests that money, starting at $500,000.
gambles on your company by accepting low salary plus some stock.
does IPO paperwork and sells a lot of your stock, getsing 7% of the whole IPO for it.
after your company does the IPO, anyone in the world can become your investor.
Visually provides on-demand access to the world's top designers and copywriters.Learn More About Visually Infographics
The holidays are a great time to tell your brand story. From Black Friday trends and Mobile Shopping guides to the Best and Worst Times to Book Travel and Thanksgiving etiquette, the Visually team will help you craft your brand's unique stories and raise your social profile during the noisy holiday season.