Startup dilution done right: Lemonade IPO edition

Startup dilution done right: Lemonade IPO edition

Each founder’s biggest trouble is dilution — merchants continuously carving off chunks of their equity in spherical after spherical of project financing. Founders collectively absorb 100% of their corporations within the origin, on the opposite hand it isn’t queer for them to absorb single digits after years have passed by and hundreds of thousands of VC greenbacks have flowed into their startup.

So I used to be a tiny bit taken aback to glance the numbers at the present time in Lemonade’s S-1 that confirmed right how smartly the firm has been ready to grow its invested capital and valuation while taking comparatively tiny dilution. When you happen to are a founder procuring for a job mannequin, Lemonade would possibly perchance well additionally right be the one scenario you are going to be ready to have while raising with regards to $500 million in most smartly-most standard equity funding throughout five rounds.

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