The Founder’s Playbook:
10 Essential Insights for Navigating
Startup Growth and Fundraising
2 0 2 4
www.radwanium.com
Highlights
www.radwanium.com
Founding Teams: The Power of
01 Partnership 08 Seed to Series A: A Hurdle to Overcome
02 Equity Splits: Finding the Balance 09 Startups Aren't Linear
03 Founder Equity: Vesting Schedules Matter 10 Hiring a Director at Your Startup: Salary
and Equity Expectations
04 Advisor Equity: Balancing Contribution
and Compensation
05 Employee Equity: Structuring Your ESOP
06 Timing Your Fundraising: When to Make
Your Move
07 Benchmarking Your Valuation
2 0 2 4
02
1
Founding Teams: The Power of Partnership
• When it comes to starting a company, collaboration often outshines solo efforts.
• A survey of 7,764 companies reveals a clear trend: most companies are founded
by teams, not individuals.
• Among these, two-founder teams are the most common, accounting for 36%.
• This is a strong indicator that having a co-founder is not just a preference—it’s a
strategic advantage.
• A diverse team allows for shared responsibilities, complementary skill sets, and
better decision-making under pressure, all of which are vital during the
Advice
challenging early stages of a company.
If you’re a solo founder, consider finding one or two co-founders who complement
your skill set and share your vision.
www.radwanium.com 03
2
Equity Splits: Finding the Balance
• One of the first and most critical decisions co-founders make is how to split
equity.
• Data shows that in companies with two founders, the median split is 55% to
45%, reflecting a slight weighting toward one founder, likely based on factors
like initial idea ownership, time commitment, or prior contributions.
• This balance is important for maintaining alignment and motivation while
recognizing each founder's contributions.
Advice
When deciding equity, focus on fairness and future-proofing your partnership. Openly
discuss expectations, roles, and potential scenarios to avoid conflicts down the road.
www.radwanium.com 04
3
Founder Equity: Vesting Schedules Matter
• Vesting schedules are essential, not just for employees and investors, but
especially for founders themselves.
• Why? They protect the company and ensure long-term commitment. If a
founder departs early, the unvested shares can be reallocated to support the
company’s future.
• Standard terms include vesting periods of 4 to 6 years, often without a cliff for
founders, as they are already deeply invested in the business from day one.
• Founders typically receive equity as RSAs (Restricted Stock Awards), which offer
tax benefits and ownership flexibility when properly structured. Advice
Implement a vesting schedule for all founders to align incentives, minimize risk, and
create fairness within the team.
www.radwanium.com 05
4
Advisor Equity: Balancing Contribution and
Compensation
• Advisors play a critical role in guiding early-stage startups, but equity
compensation should reflect their contributions and time commitment.
• Data shows that only 10% of pre-seed advisors receive 1% or more in equity,
and the median allocation declines from 0.25% at pre-seed to 0.07% by Series A.
• Advisors, like founders, should also have vesting schedules, typically lasting 2
years with a short cliff. This structure ensures that advisors deliver value
consistently over time.
• NSOs (Non-qualified Stock Options) are the preferred method for granting
Advice
advisor equity, as they provide flexibility without immediate tax implications.
Be strategic with advisor equity—offer a fair share that aligns with the value they
bring. Use vesting schedules to protect your startup.
www.radwanium.com 06
5
Employee Equity: Structuring Your ESOP
• Establishing an Employee Stock Option Pool (ESOP) is crucial for attracting and
retaining top talent.
• The median ESOP size ranges from 13% to 20%, providing flexibility to reward
employees without diluting founders significantly:
• .For early hires, equity allocations tend to be larger: Hire 1 typically receives
1.49%, while Hire 5 drops to 0.34%.
• Like founders and advisors, employees should have vesting schedules. A 4-year
schedule with a 1-year cliff is the norm, ensuring employees remain committed
Advice
while contributing to the company’s growth.
Be transparent about your ESOP structure. Tailor equity grants to reflect the
• Equity for employees is generally issued as ISOs (Incentive Stock Options), which
employee’s role, contribution, and stage of joining, while balancing long-term equity
offer tax advantages. However, early employees may receive RSAs.
management for the company.
www.radwanium.com 07
6
Timing Your Fundraising: When to Make Your
Move
• Timing is everything in fundraising, and knowing when investors are most active
can significantly impact your success.
• Data shows that more than 10% of all deals are closed in December, making it
the most active month for fundraising. Investors are eager to finalize deals
before year-end deadlines, which creates momentum.
• Conversely, January is the slowest month, with fewer than 7% of deals closed.
The new year often brings a slower start as investors regroup and plan their
strategies.
Advice
Plan your fundraising efforts to hit peak investor activity. Start engaging with investors
as early as October to build momentum, aiming to close deals by December.
www.radwanium.com 08
7
Benchmarking Your Valuation
• Knowing your benchmarks for valuation, cash raised, and dilution is critical for a
successful fundraising strategy.
• Post-money valuations showed solid growth in Seed and Series A rounds as
round sizes are increasing at the 50th percentile, especially in SAFE rounds,
where valuation caps are key determinants.
• Expect ~20% dilution per round—a standard that has held steady for Seed and
Series A. However, keep in mind that dilution is calculated independently for
each round.
• Avoid getting too fixated on valuation alone. Remember, the terms of the deal Advice
(control, dilution, rights) and the relationship with the VC can have a greater
Use these benchmarks to negotiate effectively and set realistic expectations for your
impact than the initial valuation.
round. Plan for longer timeframes between rounds.
www.radwanium.com 09
8
Seed to Series A: A Hurdle to Overcome
• Transitioning from Seed to Series A remains a significant challenge for startups.
Looking at the 2018 cohort, 38% of seed startups graduated to Series A within 3
years—a strong but realistic benchmark.
• The 2020 cohort, inflated by boom-time valuations, reflects potentially
unsustainable graduation rates. Comparatively, the 2022 cohort is struggling to
match even pre-boom performance. Why does this matter? For VCs, graduation
rates are a critical interim metric, serving as a baseline for portfolio health in the
long-term venture cycle.
• For founders, this data highlights the importance of aligning your growth Advice
strategy with investor expectations. If you plan to scale without taking further
Be aware of how VCs measure success and plan your fundraising narrative
rounds, that's great! But it’s vital to communicate that plan clearly to VCs so they
accordingly. Graduation to Series A isn’t just about raising capital—it’s a validation
can manage their expectations.
milestone that signals growth and resilience to investors.
www.radwanium.com 10
9
Startups Aren't Linear
• Startups aren’t a straight path. Some accelerate quickly through funding rounds,
while others face bumps or delays. These moments of stagnation or struggle
may look like failure from the outside, but they often signal that the company is
laying the groundwork for future success.
• The median age for startups raising a priced seed round in 2024 is 1.2 years, but
there are also startups from as far back as 2017 still getting funded. In fact,
Series B rounds in 2024 saw 4% of companies founded in 2015, showing that
funding success doesn’t always happen in a straight line.
• The speed of scaling is often incentivized by the structure of venture capital—
Advice
rapid growth signals to investors that the company might be a future winner
and drives up valuations, improving VC fund performance. Speed doesn’t always equate to success. Founders shouldn’t feel pressured to rush.
Building a sustainable business often takes time
www.radwanium.com 11
10
Hiring a Director at Your Startup: Salary and
Equity Expectations
• When hiring a director for your startup, the salary gap between a $50M startup
and a $500M startup may not be as vast as you’d expect.
• Certain roles, such as Marketing or Operations, may see higher salary gaps, but
on average, you can expect around a 20% increase in base salary for a 10x
valuation increase.
• As a founder, you’re faced with a challenge: Is the comfort of a 20% higher
salary worth the smaller equity at a larger company? Or does the high-risk
equity at a smaller startup offer more potential, even if it’s uncertain?
Advice
When hiring at the director level, especially in the early stages of your startup, you’ll
need to weigh the salary vs. equity trade-off carefully.
www.radwanium.com 12
Disclaimer
This document is not to be construed as legal, financial, or tax advice and is for informational purposes only.
This document is not intended as a recommendation, offer, or solicitation for the purchase or sale of any security. Although this presentation may provide information
concerning potential legal issues, it is not a substitute for legal advice and any opinions or conclusions provided in this presentation shall not be ascribed to us. We do
not assume any liability for reliance on the information provided herein.
The source of the data in the document is attributed to Carta.
www.radwanium.com 13
www.radwanium.com
Are you ready for
fundraising?
We have helped startups raise more
than $20mn in pre-seed, seed, and
Series A rounds
WEBSITE EMAIL
www.radwanium.com [email protected]
TELEPHONE BOOK A FREE CONSULTATION
+44 7958 044 643 https://calendly.com/hadi-radwan-1/15min
2 0 2 4
14
