Fundraising
Do You Have a Clean Cap Table?
A messy cap table is a huge red flag for investors and can stop someone from investing entirely. At LAUNCH, it's the biggest red flag seen in early-stage companies.
Founder ownership benchmarks by stage
| Stage | Founders' collective ownership |
|---|---|
| Pre-Series A | 50–65% |
| Series A | 40–50% |
| Series B | 30–40% |
| Series C | 20–30% |
| IPO / Exit | 10–20% |
If your ownership is significantly below these benchmarks at an early stage, investors will ask hard questions.
Common cap table mistakes
Giving away too much to service providers. Do NOT give away a large percentage of your company to a dev shop or consulting firm in the early days. Investors want to see capital efficiency — if equity went to someone who built a prototype, that's a red flag.
Raising a lot without results. If you've raised significant capital and are still pre-revenue or pre-product, that raises concerns. Investors will scrutinise what happened to the money.
Keep your cap table clean from day one — it is much harder to fix later.