Don't be ashamed.
Dilution can be tough in Europe.
...And please, don’t even try to compare yourself to Silicon Valley standards.
First, because when Silicon Valley investors brag on Twitter about some crazy level of dilution, they are talking about a very competitive market that most of us just can’t access.
After all, it’s not that easy to go live in the US and start a US company. Some of us have family constraints or personal lifestyle requirements that make the US a non-option.
And besides, it wasn’t very long ago that cap table dynamics even in Silicon Valley weren’t very good.
Cap table dynamics are derived from two things: supply and demand.
Over time, they can be affected by the founder using strategic positioning for the next round.
For example, if the startup valuation goes too high in seed, especially in a market where there is a lot of seed money because of tax incentives, it is not uncommon to have Series A rounds be much tougher. That means you could have a ton of dilution or a very small valuation bump in that round.
And when you’re in a non-mature market far from Silicon Valley, every scenario is possible.
That’s why you want to get the best deal, but don’t benchmark yourself with what you see on the outside.
If your company skyrockets, you will catch back up easily.
No one wants to lose the entrepreneurial spirit in something that’s got great traction. So don’t forget that essential truth ;)
Investors and cap tables are just a reflection of bigger forces: the market & traction from customers. Focus relentlessly on building traction and everything else will follow.
P.S.: It’s better to be diluted by people you love than to have more ownership alongside people you despise - companies that optimize for the latter always end up dead.
The Family’s next startup batch will happen remotely starting in January! If you’re an entrepreneur willing to grow your startup in the best conditions, apply here. Get ready for an intense 6-week program: getting smart advice, accessing top operators and fundraising with the best investors.