Startup Funding Demystified – Splitting The Equity Pie With Investors

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To explain how startup funding works we first visualized the main thing funding depends on – growth. Essentially it’s a bar chart. The more you grow, the more funding you get.
But what does it mean to grow? Literally when people grow, they move to a bigger place. Companies move to bigger buildings.
Who makes companies grow? People. The more you grow, the more people you have.
We got this far but the devil was in the details. How do you connect all the elements without them being overwhelming?
We went back to sketching and realized that it’s better to visualize equity dilution as the slicing of a pie.
The pies turned into pie charts. The bigger the company, the bigger the pie, and the more people dividing it. 
To keep track of who is who we color-coded everyone.
Now we applied data from Paul Graham’s essay. And finally the infographic looks finished.

Originally posted 2016-11-19 03:39:40.

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