SUMMARY
- Most pre-seed and seed rounds give up roughly 10% to 20%. Above 25% at pre-seed, stop and check your valuation or raise size.
- Equity = investment ÷ post-money valuation. Rs 1 crore at Rs 9 crore pre-money buys 10%. At Rs 4 crore pre-money, it buys 20%.
- Plan for the next round too. The median founding team holds about 56% after seed and 36% after Series A, per Carta.
Someone finally wants to write you a cheque. Then the real question lands: how much equity should you give an investor?
Get it wrong and you’ll feel it for years. Give away too much early and there’s little left for your co-founders, your first hires and the investors who arrive later. Give away too little and the round may never close.
Here’s the short answer. At pre-seed and seed, most rounds sit between 10% and 20%, and going past 25% in a first round is a sign to stop and check your maths. But the percentage is never the real decision. It’s the result of two numbers you control: how much you raise, and what your company is worth before the money arrives.
The one formula behind every equity offer
Strip away the jargon and every offer comes down to two lines of arithmetic.
Post-money valuation = Pre-money valuation + Investment
Investor’s equity = Investment ÷ Post-money valuation
Pre-money is what your company is valued at before the cheque lands. Post-money is the value right after. So if you raise Rs 1 crore at a Rs 9 crore pre-money valuation, post-money is Rs 10 crore, and the investor owns 1 ÷ 10, which is 10%.
Now change only the valuation and watch the same cheque move.
| Pre-money valuation | Post-money valuation | Investor gets |
|---|---|---|
| Rs 4 crore | Rs 5 crore | 20% |
| Rs 5 crore | Rs 6 crore | 16.7% |
| Rs 6 crore | Rs 7 crore | 14.3% |
| Rs 9 crore | Rs 10 crore | 10% |
| Rs 14 crore | Rs 15 crore | 6.7% |
| Rs 19 crore | Rs 20 crore | 5% |
The same Rs 1 crore cheque can buy anywhere from 20% to 5%
Investor’s stake at different pre-money valuations. Only the valuation changes.
Formula: Investor’s equity = Investment / (Pre-money + Investment). The dark bar is the 10% example used in the article. Illustrative calculation, not legal or financial advice. Source: StartupIndiaX.
Same cheque, same investor, and the stake swings from 20% to 5%. That’s why the valuation deserves more of your negotiating energy than the percentage does.
You can run it backwards too. If an investor offers Rs 50 lakh for 10%, the post-money valuation is Rs 5 crore (Rs 50 lakh ÷ 0.10), which makes the pre-money Rs 4.5 crore. Plenty of first-time founders agree to a percentage without checking which valuation it quietly locks in.
So how much equity should you give an investor in India?
There’s no official rule, and no single Indian median you can fully trust. Still, the published ranges line up more than you’d expect.
| Stage | Typical equity given | Where it comes from |
|---|---|---|
| Accelerators and incubators | 5% to 10%, for roughly Rs 10 lakh to Rs 25 lakh | myHQ seed funding guide |
| Pre-seed | 10% to 20%, with most rounds at 15% to 18% | Capwave, 2026 |
| Seed | 10% to 20% in most Indian rounds, median near 19% in 2025 | myHQ, FundVault |
| Series A | Roughly 15% to 25% | SheetVenture |
Treat these as a sanity check, not a target. Capwave’s framework puts seed at 18% to 25%, and much of the published data comes from US rounds or advisory firms, so your sector, city and traction matter more than any average.
One rule of thumb does hold up. If a pre-seed round asks for more than 25%, something’s off. Either the valuation is too low or you’re raising too much too soon. Strong traction, an experienced team and several investors competing for the deal usually push you toward the lower end.
Start from what you can afford to give up
Most founders begin with the raise (“I need Rs 1 crore”) and let the investor set the percentage. Flip it.
Maximum raise = Maximum dilution you’ll accept × Post-money valuation
Say you won’t go beyond 15% this round, and you can defend a Rs 6 crore post-money valuation. Your ceiling is 0.15 × Rs 6 crore, which is Rs 90 lakh. If your plan truly needs Rs 1 crore, you have two honest options: raise the valuation with better evidence, or trim the plan.
Raise what your next milestone needs, not the biggest number an investor will sign. Indian seed guides give the same advice: if Rs 2 crore gets you to your milestones, don’t raise Rs 5 crore.
The bill that arrives later: the next round and the ESOP pool
Here’s what surprises first-time founders. The 20% you sell today isn’t the only cut you’ll take. Every later round shrinks everyone who already holds shares, and investors usually want an employee option pool (ESOP) set aside before their money goes in. That pool comes out of the existing holders’ share, not the new investor’s.
Try it with two co-founders who own the company 50/50.
- Seed: Rs 2 crore at Rs 8 crore pre-money. Post-money is Rs 10 crore, so the investor gets 20%. A 10% option pool is created before the round, so the founders together end at 70%.
- Series A: Rs 10 crore at Rs 40 crore pre-money. Post-money is Rs 50 crore, so the new investor gets 20% and everyone else shrinks to 80% of what they held.
The rule is simple: Ownership after a round = Ownership before × (1 − new investor’s %)
| Holder | After seed | After Series A |
|---|---|---|
| Founders (together) | 70% | 56% |
| Seed investor | 20% | 16% |
| ESOP pool | 10% | 8% |
| Series A investor | 0% | 20% |
Each investor took 20%, yet the founders slid from 100% to 56%, or 28% each. And that’s before any pool top-up at Series A, which would push it lower still.
This isn’t a quirk of one example. Carta’s 2026 Founder Ownership Report shows the median founding team keeps about 56% after seed and 36% after Series A. By Series C, founders hold 16.1%, less than the 16.8% held by the employee pool. Software and AI founders tend to keep more than those in physical industries: 37.5% against 30.5% after Series A.
Founders keep about 36% by Series A, and less than the ESOP pool by Series C
Median share of fully diluted equity held by the founding team, by funding stage.
Source: Carta Founder Ownership Report 2026 (median, fully diluted). Series B is not shown because a primary-source figure was not verified. Actual ownership varies by sector and round.
Read More: Aman Sanger Story: Cursor AI Founder Journey 2025
Want to run your own rounds? Plug them into the Dilution Calculator and watch a live cap table across Seed, Series A and Series B, option pool included.
What’s different when you raise in India
Three things change the maths, or at least the paperwork.
Angel tax is gone. For years, Indian founders priced rounds with one eye on angel tax, which taxed share premium above a “fair” valuation under Section 56(2)(viib). The Finance (No. 2) Act, 2024 removed it for shares issued from 1 April 2025. Older assessments can still be alive, and FEMA and valuation rules still apply, so read this explainer before you assume everything is simple.
The instrument decides when you learn your percentage. In a priced round, you know today. With convertible instruments, you find out later. Most SAFE-style money in India lands as CCPS (compulsorily convertible preference shares), and the Indian version of the SAFE, the iSAFE, is structured as CCPS. Convertible notes are open only to DPIIT-recognised startups, with a minimum of Rs 25 lakh per investor per tranche. Advisers also say a plain US-style SAFE shouldn’t carry foreign money into an Indian company.
A cap is a ceiling, not a percentage. With a valuation cap, you agree a maximum valuation instead of a stake. If it works as a post-money cap, Rs 1 crore on a Rs 10 crore cap converts to roughly 10%. Stack a few caps and the total can surprise you badly at Series A.
Now look at a real Indian round. Baby-care quick-commerce startup Kiddo recently raised Rs 12.5 crore in a pre-seed round led by Campus Fund. As reported, the announcement didn’t include ownership terms or a valuation, which is normal for a private round. So the cheque size alone tells you nothing about the percentage. Illustration only, not Kiddo’s actual terms: Rs 12.5 crore is 25% at a Rs 50 crore post-money valuation and 12.5% at Rs 100 crore.
Before you sell equity, check grants. The Startup India Seed Fund Scheme offers up to Rs 20 lakh in grants and up to Rs 50 lakh in soft loans through empanelled incubators, and our Government Scheme Finder filters 30+ central schemes by sector and stage.
Read More: Top 10 Government Schemes Boosting AgriTech and Rural Startups
Red flags before you sign
- A first cheque above 25% at pre-seed. Go back to the valuation and the raise size.
- Anyone asking for 51% or more. A holder above 50% can usually pass ordinary resolutions alone, and 75% is needed for special resolutions under the Companies Act. Early on, that’s handing over control.
- A liquidation preference above 1x non-participating. Sell for Rs 10 crore with a Rs 2 crore investor holding 20% and a 2x participating preference: they take Rs 4 crore first, then 20% of the remaining Rs 6 crore. That’s Rs 5.2 crore, or 52% of the sale, for a 20% stake. 1x non-participating is the far friendlier standard.
- Too many tiny cheques. A cap table crowded with small shareholders is a structural problem later investors notice.
A five-minute check before you say yes
Run your own numbers first. StartupIndiaX’s free Founder Toolkit has 9 no-login tools built for Indian numbers, and four of them fit this decision:
- Startup Valuation Calculator: VC method, revenue multiple and scorecard, all in Rs crore.
- Dilution Calculator: a live cap table across rounds.
- Co-founder Equity Split Calculator: settle the founder split before investors look at it.
- Indian VC and Investor Database: filter by sector, stage and cheque size.
You’ll find more guides in our Founder Toolkit section.
So, how much equity should you give an investor? Enough to fund your next milestone, priced at a valuation you can defend, and small enough that the round after this one still leaves you in charge. If you take three things into the negotiation:
- Work out the valuation hidden inside any percentage before you agree to it.
- Decide your maximum dilution first, then calculate the biggest raise it allows.
- Model the next round now, ESOP pool included, so Series A holds no surprises.
Have a term sheet on your desk? Tell us the percentage you’ve been offered in the comments, no investor name needed. If this helped, share it with a founder who’s about to raise.
This article is general education, not legal or financial advice. Have a lawyer review any term sheet or shareholder agreement before you sign.
FAQs
What percentage should I give my investor?
There’s no fixed number, but most pre-seed and seed rounds fall between 10% and 20%. The exact figure is investment divided by post-money valuation, so it depends on how much you raise and how your startup is valued.
How much equity should I give for a Rs 1 crore investment?
It depends on valuation. At a Rs 9 crore pre-money valuation, Rs 1 crore buys 10%. At Rs 4 crore pre-money, the same cheque buys 20%. Divide the investment by the post-money valuation to check any offer.
Is 10% equity a lot for an investor?
Usually not. At pre-seed or seed, 10% is at the lower end of the typical 10% to 20% range. Whether it’s fair depends on the valuation it implies, so always work out the post-money number.
Can an investor take 51% of my company?
Legally, yes, if you agree to it. But a holder above 50% can usually pass ordinary resolutions alone, so you’d lose control. At early stages, this is a serious red flag. Talk to a lawyer before signing anything close.
What happens if I give away too much equity early?
Later rounds dilute you further, so founders can end up with too little to stay motivated or to hire with options. New investors may also hesitate. Capwave suggests pausing if a pre-seed round goes past 25%.
Does angel tax still apply when I raise money in India?
No, for shares issued from 1 April 2025. Section 56(2)(viib) was omitted by the Finance (No. 2) Act, 2024. Older assessments for earlier raises can still be pending, and FEMA and valuation rules still apply.