Equity Calculator: How do I start?
For any founder raising investment, one of the questions usually top of mind is how much equity you’ll have to give up to get the cash you need. As a founder, you’ll likely want to hold on to as much of your company as possible, but the extent to which you can do so is necessarily dependent on the two other factors in the fundraising equation: how much you want to raise, and your valuation. The equation looks like this:
Investment Amount / Valuation = % Equity Offered
So, if your company is valued at £1M, and you want to raise £200K, you’ll need to offer 20% equity in your business. If you want to give up less equity, you’ll need to reduce the amount of investment needed, or increase your valuation.
Whilst the factors in this equation are unique to every business, if you’re looking to get a rough idea of the typical amount of equity you might need to give up, this calculator can help you. To create it, we’ve used data from the 1000+ fundraises on the Seedrs platform to calculate the average equity offered by businesses in varying sectors and round sizes.
Before you start, here are a few things to note:
- The calculator is designed for business raising funds through equity crowdfunding.
- It’s intended to provide a broad estimate, and should not be taken for a precise calculation.
- The results are based on the data from previously funded campaigns on Seedrs.
- Some results are omitted where we don’t have sufficient data in that particular raise/sector combination.
Some considerations when looking at equity crowdfunding percentages:
Company maturity is not taken into account for this calculator, only the amounts raised. Keep in mind that technically, some of the raises for £100k for example, could be small bridges by established companies, and others could be big seed rounds for brand new businesses. This means that there’ll be a big variation in equity offered, as the businesses are at different stages of maturity and risk.
Ready to run fundraising campaign through the crowd?
If you understand how much equity you are willing to give away based on the capital you want to raise we advise you to submit your application to raise funds on Seedrs to get the ball rolling.
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Related content: On-demand Webinar: Equity Crowdfunding 101