Strategy & Portfolio
Last updated
Quick Answer
The percentage of a company that a VC fund aims to own after making an investment, typically used to determine check size.
An ownership target is the minimum equity stake a venture fund seeks when making an investment. Most lead investors target 15-25% ownership at entry, while seed funds may target 7-15%. The ownership target drives check size calculations: if a fund targets 20% ownership in a company valued at $50M post-money, the check size must be $10M. Ownership targets are critical for portfolio math and fund economics.
In Practice
The fund's 20% ownership target at Series A meant they needed to invest $12M in the $60M post-money round. When the valuation increased to $80M, they had to decide whether to write a $16M check or accept lower ownership.
Why It Matters
Ownership targets determine whether a fund can generate sufficient returns. A fund that consistently under-owns its winners won't produce top-quartile returns, regardless of how good their picks are.
VC Beast Take
Ownership is the venture capital game. If you can't get enough of it in your best companies, nothing else matters.
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An ownership target is the minimum equity stake a venture fund seeks when making an investment. Most lead investors target 15-25% ownership at entry, while seed funds may target 7-15%.
Understanding Ownership Target is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Ownership Target falls under the strategy category in venture capital. This area covers concepts related to the strategic approaches to portfolio construction and management.
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