Total Financing at Time of Venture-Backed IPO

IPO Station, Line D

Image via Wikipedia

Continuing with yesterday’s post on Founder Equity at Time of IPO, it’s also important to look at how much money each company raised to get to their S-1 filing for an IPO. As expected, the amount raised and the amount of equity the founders own are correlated, with higher amounts of money raised related to less ownership.

Here are some data points on total financing at time of IPO for these venture-backed startups:

Another important element of founder ownership at time of IPO relative to venture funding is how far along the business was when it first raised money. Jive Software, as an example, was very far along before raising money, and thus the co-founders combined still have roughly 30% of the business. Bazaarvoice, which was extremely capital efficient only raising $23.6M, raised money at lower valuations and thus the founders took on greater dilution, resulting in less ownership than the Jive Software founders, even though they raised less than half the money.

Total amount of money raised as well as where in the startup lifecycle the money was raised are two major drivers of founder ownership in a business.

What else? What other thoughts do you have on total financing at time of venture-backed IPO?

One thought on “Total Financing at Time of Venture-Backed IPO

  1. Good post, David. Of note: in some of these rounds, VC cash was likely used to provide liquidity to founders/early investors, which may impact some of the %ages at time of IPO.

    Also, I may be wrong, but I think that Crunchbase is overstating the amount that ET raised (might be double counting one of the rounds).

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