The first time that a startup raises capital is normally called a ‘seed round’. Other names include angel round or HNI round. Some even call it a pre-Series A round, but this term usually refers to a small interim fundraising exercise between the seed round and Series A. In the seed round, dilution of the founder’s equity (i.e. the amount of ownership that he or she will have to give up) is a function of (a) the quantum of funds that the startup is looking to raise, (b) where the startup is (in terms of traction), and (c) where the funding will take the business.
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