The answer is not simple. Giving up too much can leave founders without control or motivation in the medium term, but giving up too little can close doors to key investors or prevent funding the company's growth.

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In this article, we analyze how to calculate how much equity to give up in the first round of funding, what ranges are reasonable in the current market and what variables should be taken into account for the cap table and ensure the company's long-term sustainability.

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Understanding shareholder dilution and its consequences

Dilution represents the reduction of the participation of existing partners when new shares or shares are issued to bring in investors.

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The basic formula for calculating it is: Percentage provided = Investment/Post-money valuation

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Dilution directly affects:

• Control and decision-making: Lower participation implies less capacity for influence.
  
  
• The motivation of the founding team, which needs to retain sufficient participation to maintain the incentive.
  
  
• The ability to lift future rounds, since venture capital funds value balanced structures.
  
  
• The final economic value, because what is relevant is not the percentage, but the value that this percentage will represent in the future.
  
  

Therefore, the objective is not to minimize dilution, but to optimize it: to achieve a figure that allows growth to be financed while maintaining control and attractive for new investments.

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Common dilution ranges depending on the development phase

Although each transaction has its peculiarities, the Spanish market of Venture Capital maintains certain common tendencies. In accordance with the Venture Capital and Private Equity Report in Spain 2025 (The Referrer) and the data of Dealroom, the average dilution rates in technology startups are as follows:

In phases Pre-Seed, the influx of external investors is increasingly common, especially after the professionalization of the Spanish ecosystem. According to data from Startupxplore and The Referent, more than 60% of pre-seed rounds in 2024 had at least one Business Angel professional or a specialized micro-fund.

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Therefore, even at the earliest stages, founders must be prepared to negotiate equity and structure a Cap table solid from the start.

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How to establish a pre-money valuation at an early stage

The pre-money valuation determines the percentage of capital that will be transferred. However, in the early stages, traditional financial methods are of little use due to the lack of stable metrics.

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Instead of being based solely on income or benefits, seed and pre-seed valuations are based on qualitative factors such as:

• Traction level and commercial validation.
  
  
• Quality and complementarity of the founding team.
  
  
• Potential market size (TAM, SAM, SOUND).
  
  
• Level of innovation and technological barriers to entry.
  
  
• Existence of intellectual property or know-how differential.
  
  
• Comparable companies within the sector.
  
  

According to the report of Dealroom Spain 2025, the average ratings of pre-seed startups are between 1.2 and 2.5 million euros, while seeds range from 3 and 6 million, depending on the sector.

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Methodology for defining the optimal percentage of capital to be transferred

To determine the appropriate dilution, it is advisable to follow a structured process:

1. Define specific objectives for the use of funds. Identify what milestones are intended to be achieved with the investment (validating the product, scaling sales, hiring key teams, etc.).
   
   
2. Estimate the reasonable pre-money valuation. Based on comparables and on the risk assumed by the investor.
   
   
3. Calculate the expected dilution. Applying the relationship between requested capital and post-money valuation.
   
   
4. Simulate the future shareholder structure. Include a Pool of employees (10—15%) and project the impact of future rounds.
   
   
5. Adjust the funding strategy. If the dilution is excessive, convertible instruments (SAFE, convertible notes or ENISA/CDTI equity loans) may be chosen to defer valuation.
   
   

Factors that influence the decision on the equity to be offered

1. Level of maturity and risk of the project: In projects with high technological or market uncertainty, investors will demand greater participation in exchange for the risk assumed. As the company validates its proposal and builds traction, it can negotiate lower dilutions.

2. Type of investor and strategic contribution: Investors who offer active support, access to clients or strategic advice sometimes justify higher participation, especially if their involvement accelerates growth.

3. Outlook for future rounds: Each additional round will generate a new dilution (15—25% average). Therefore, founders should keep at least 50-60% of their capital before a Series A, ensuring stability and motivation.

4. Incentives for talent: The creation of a Employee Stock Option Pool (ESOP) from an early stage, between 10% and 15%, is essential to attract and retain key talent.

5. Governance Clauses: Beyond the percentage, aspects such as voting rights must be considered, Liquidation Preferences or veto rights. Operational control does not depend only on equity, but on the agreement of partners.

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Reference shareholder structure for technology startups

A balanced shareholder distribution makes it easier to attract investment and ensures the sustainability of the project. The following table reflects a realistic and updated model:

This structure allows founders to maintain operational control at least until Series A, retaining incentives and trading room in future rounds.

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Common mistakes when defining equity in the first round

1. Giving up an excessive percentage in the early stages. A 30—40% dilution in pre-seed often discourages future investments and can misalign the team.
   
   
2. Don't book a Pool for employees. Omitting it from the start can lead to unforeseen conflicts and dilutions.
   
   
3. Look for a rating that is too high. Overvaluations create friction in subsequent rounds and increase the risk of Down Rounds.
   
   
4. Do not take into account the rights associated with capital. Control clauses may be more relevant than the percentage transferred.
   
   
5. Don't plan for the impact of future rounds. The lack of foresight excessively dilutes the founders after Series A or B.
   
   

Strategies for trading without compromising growth

Negotiating an investment round without compromising the company's growth requires a balance between valuation, control and strategy. It's not just about the percentage that is given up, but about how that decision impacts the future sustainability of the project, the ability to attract new rounds and the alignment with investment partners. Companies that manage to maintain a healthy shareholder structure are those that base their valuations on real, comparable and defensible metrics, avoiding both overvaluation and undervaluation. An excessive valuation can generate distrust or block future rounds, while a valuation that is too low implies unnecessary dilutions and loss of control in the medium term.

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It is also key to build a coherent narrative that explains how the requested capital will be transformed into growth and return. Investors value both the numbers and the strategic clarity, the credibility of the team and the ability to execute. That narrative must connect the business model to a large and scalable market, and be backed by real data and validations. In this sense, selecting strategic investors, who provide knowledge, network and support, can be as decisive as the amount raised, especially in the early stages where reputation and operational support make the difference.

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Another critical factor is maintaining a balanced and well-planned capital structure. A fragmented cap table or dominated by non-operating partners can hinder the inflow of institutional funds and limit decision-making. Preserving the control and cohesion of the founding team is essential to sustain the agility and purpose of the project. In addition, beyond equity, governance clauses must be negotiated carefully, seeking a balance between investor protection and management autonomy.

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According to the Spain Startup Ecosystem Report 2025, the startups that achieve greater stability in their first rounds are those that combine financial capital with strategic value, maintaining an average dilution of 18% in their first institutional operation. This shows that founders who prioritize partner quality over amount of capital tend to grow faster and more solidly. In short, negotiating well is not about giving less, but about giving better: to the right partners, under the right conditions and with a long-term vision.

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Conclusion: the right percentage is the one that guarantees sustainability and the attraction of future capital

There is no universal percentage that should be given up in a first round. However, market data and ecosystem experience indicate that a dilution between 10% and 20% usually offers the optimal balance between funding, control and investor attractiveness.

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The ultimate goal is not to keep the maximum possible percentage, but Maximize the total value of the long-term participation. Un Cap table balanced, a realistic valuation and a solid growth plan are the foundations of an efficient funding strategy.

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In Intelectium, is accompanied by technology and deeptech startups in structuring rounds, planning dilutions and integrating public and private funding. A comprehensive approach that combines strategic vision and operational experience to ensure that every euro of investment drives sustainable and scalable growth.