Analysing founder stakes across
different stages of company growth
Equity ownership is a good incentive for startup founders to
stay with companies throughout their growth journeys. But
some degree of dilution is always inevitable when raising
equity investment, as founders swap shares for funding.
And so, the further along a company’s growth journey, the
more diluted a founder’s equity stake typically is. Whilst the
influx of capital helps to accelerate startups’ growth, this
process also reduces founder control. For this reason, most
aim to maximise their company’s valuation alongside equity
fundraisings, to minimise dilution.
As of late, European founders are also increasingly looking to
alternative methods of growth—such as venture debt—in
order to retain more control over their company’s cap tables.
Yet most high-growth UK companies still look to equity
investment as a primary means of growth.
This report focuses on founders of private, high-growth
companies, currently headquartered in the UK, that have a
shareholding. According to our data, these high-growth
founders own, on average, 43% of shareholdings in their
companies. Women retain a larger average stake than men, at
52% versus 41%.
Interestingly, the proportion of founders owning 100% of
shareholdings in their companies (8.7%) is almost exactly
equal to the proportion of those that own less than 1%
(8.8%). These figures show that around 1 in 5 founders are at
the extreme ends of the ownership scale.
Inside, we analyse how average founder stakes differ by
company stage of evolution, and by the volume and value of
equity fundraisings they’ve secured, breaking this down
further by founder gender (where gender is known).
We use eight criteria to identify
high-growth and ambitious
companies in the UK.
Each of these is a sign that a
business is either actively growing or
creating ambitious growth plans.
All companies featured in this report
have met at least one of these