You Raised. You Grew. You Own Less Than You Think.

You Raised. You Grew. You Own Less Than You Think.

🧠 It starts with 100%.

Your name on the incorporation doc.

The vision. The product. The lonely MVP launch. All yours.

Then comes momentum.

Then comes capital.

You raise a seed round. 15%.

Series A. 20%.

Option pool expansion. Convertible notes. SAFE rounds.

Fast forward 4 years, and you own 18.2% of your own company.

On paper, you’re a founder.

In reality, you’re a stakeholder — in someone else’s dream.

💸 The Illusion of Valuation

Let’s be honest.

Most founders talk about valuation like it’s money in the bank.

“It’s a $30M company.”

Cool. Can you access any of it?

Valuation isn’t value.

It’s a promise.

And that promise only pays out if the exit math clears — and you’re still holding meaningful equity when it does.

🔁 Dilution, Valuation, and Exit Are Not Separate Conversations

They’re the same story — told in different tenses:

• Valuation is your future story.

• Dilution is the cost of sharing that story.

• Exit is the final scene, where the credits (and checks) roll.

You can’t understand one without modeling the other two.

📊 The Reality Check: Simulating Your Exit

Let’s say:

• You raise $500K at a $5M cap (SAFE)

• Then $3M at $15M pre (Series A)

• Then $10M at $40M pre (Series B)

By the end, you might own 20–25% of the company.

Now imagine you exit at $100M.

Here’s how it plays out:

• Investors take back their $13.5M

• Liquidation preferences kick in (often 1–2x)

• Your 25% might become 12% real ownership

• Post-tax, post-conversion, you may walk away with less than 8% of the exit value

Even with a $100M exit, you walk away with $7–8M after years of stress, risk, and sacrifice.

That’s not nothing. But it’s also not the dream you pitched yourself in year one.

⚖️ Founders Don’t Model the Downside

You model your valuation upside.

But do you model your personal financial outcome in different exit scenarios?

Have you asked:

• What if we sell at $40M?

• What if the exit is distressed?

• What happens if the market changes, and we have to exit?

Here’s the hard truth:

Most founders have a spreadsheet for their burn…

But not for their wealth. Not for their leverage.

Not for the thing they’re spending years of their life trying to build.

🔥 The Emotional Cost of Dilution

This isn’t just math. It’s memory.

It’s the moment you realise you gave away 40% before product-market fit.

It’s the moment you dilute your own decision-making ability.

It’s the moment you realise you’re no longer in control — you’re in service.

You’re not just trading equity.

You’re trading optionality. Energy. Speed. Sanity.

🛡️ How to Think About Capital With Clarity

• Know your endgame.

  Not everyone wants to IPO. Build a cap table that reflects your definition of success.

• Model your personal exit math.

  Not just the company’s. Yours.

• Set dilution targets per round.

  Protect optionality — don’t just raise more because you can.

• Understand preferences.

  Liquidation preference > valuation in determining your actual return.

• Build leverage through clarity.

  Know your numbers better than your investors do.

🧘 Final Thought

FanDuel. WeWork. Many others.

Founders who built empires, raised big, and walked away with little — or nothing.

Not because they failed.

But because they misunderstood the mechanics of ownership.

You don’t need to own everything.

But you do need to understand what you’re giving up.

Raise what you need.

Model what you keep.

And always remember: your cap table is not just a spreadsheet — it’s your legacy.