Founder Ownership Report 2025

Authors:

Peter Walker, Kevin Dowd

Read time:

2 minutes

Published date:

21 January 2025

How do startups divide their equity among co-founders and other key shareholders? This first-of-its-kind data report offers a comprehensive guide.

Executive summary

Every startup begins with an idea. And that idea begins with the founding team.

In some cases, that founding team is one individual—a solo entrepreneur with an appetite to do it all. In other cases, the team includes multiple co-founders who hope to use their complementary skills to conquer a market.

In the beginning, the founding team typically owns all of the startup’s equity. But this state of affairs rarely lasts for long. From the outset, deciding how to divide equity among co-founders, investors, employees, and other stakeholders is a strategic choice—and it remains critical as a company continues to grow.

This report uses anonymized data from more than 45,000 startups incorporated from 2015 through 2024 to shed new light on how founder ownership works across the U.S. venture ecosystem, digging into first-of-its-kind data on the composition of founding teams, how founding teams divide their initial pool of equity, and how equity ownership evolves as startups move through their fundraising journeys.

How should a company spend this precious equity resource? We hope this data can help founding teams and their investors as they consider this question at every stage of the venture-backed journey.

Report highlights

• Solo founders are stepping up: The percentage of all startups incorporated on Carta that are led by a solo founder has more than doubled over the past decade, reaching 35% in 2024. Over this same span, startups with three, four, and five founders have become less prevalent.

• Solo founders are less likely to raise VC funding: Compared to larger founding teams, solo founders are less successful in raising venture capital. While solo founders comprised 35% of all companies incorporated in 2024, they accounted for just 17% of all companies launched in 2024 that also closed a VC round before the end of the year.

• Equal equity splits are becoming more common: While most founding teams choose to divide equity among themselves on an unequal basis, a growing number of co-founders are opting for an even split. In 2024, 45.9% of two-person founder teams divided up their equity equally, compared to 31.5% back in 2015.

• Founder ownership declines most at early stages: After raising a seed round, the median founding team collectively owns 56.2% of their startup’s equity. At Series A, that figure falls to 36.1%, and at Series B, it’s 23%.

Full report available—Start reading now for free:

Author: Peter Walker

Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.

Author: Kevin Dowd

Kevin Dowd is a senior writer covering the private markets. Prior to joining Carta, he reported on venture capital and private equity at Forbes, where he wrote the Deal Flow newsletter, and at PitchBook, where he wrote The Weekend Pitch.