What is Series A funding, and what do investors expect at that stage?
Series A is usually a startup's first priced round led by an institutional VC, raised once the product clearly works so the money goes into scaling it rather than finding it. Investors expect evidence, not promise: revenue or usage growing month after month, customers who stay, unit economics that improve with scale, and a team that can hire. Expect to sell about 20% of the company in the round; Carta's 2026 data puts median founder ownership at 36% after it. In India, Series A and B funding rose 38% year on year in Q3 2026 by Inc42's count, even as investors grew choosier. Have clean books, a cap table and the documents on YC's diligence checklist ready before you start.
This is the cleanest statement of the per-round rule of thumb backed by Carta's data across 1,200+ rounds: roughly 20 percent at seed, 20 percent at Series A, 15 percent at Series B, then 10 to 15 percent. Lemkin's blunt closing point (that dilution adds up and there are real benefits to being efficient instead of chasing every round) is exactly our stance. Do the arithmetic on those numbers and two founders splitting the company are already near the single digits by Series B if every round runs hot, which is why you model forward before you sign.
Carta's March 2026 data on how founders' ownership falls through each round and how teams split equity: the median founding team holds about 56% after seed and 36% after Series A, and even splits are rising.
Inc42's read of the July to September 2026 quarter in India: $2.2 billion raised, fewer deals and fewer active investors, with growth-stage (Series A and B) funding up 38% year on year.
This is the exact list a founder gets handed once a term sheet lands, written by YC Continuity's general counsel after hundreds of financings, so it is the request list itself and not a vendor's marketing checklist. It spells out the corporate, equity, IP, and financial documents investors ask for, and it makes the core point plainly: assemble the data room before you sign, and you cut about a week off closing. Treat it as a starting point to pre-build your folders, not a legal opinion on your specific deal.
The scramble is avoidable: having board minutes, stockholder and option lists, incorporation docs, and recent financials ready before the term sheet saves roughly a week at closing.
Investors want the paper trail of your equity (who owns what, at what price, on what dates), so a clean cap table and signed option agreements sit at the centre of the ask.
This is post-term-sheet reality, so build the folder structure now while things are calm rather than reconstructing it under a deadline.
This is the one term sheet to benchmark your own against. YC wrote out the fairest single-page term sheet they could from having reviewed hundreds of Series A deals, and every bracketed item is exactly the clause that gets negotiated. It calls out the specific traps by name: participating preferred, cumulative dividends, and a 2-2-1 board versus the founder-friendly 2-1. Download the Word doc, drop your investor's term sheet beside it, and every deviation is a question you now know to ask.
From
Y Combinatorby Jason Kwon and Aaron Harris20 min read + Word template
The bracketed items in the template (beyond company and lead investor names) are precisely the terms that are always or frequently negotiated, so they are your negotiation checklist
Board control matters more than valuation: aim for a 2-1 (two common, one investor) structure, not the investor-heavy 2-2-1 that can let a board fire the founders
Clean means 1x non-participating liquidation preference, broad-based weighted average anti-dilution, and no cumulative dividends; anything richer for the investor is a flag
Once you accept that the market sets the price, this piece shows you the actual methods investors reach for when there is no revenue to anchor on: comparables from recent deals, the scorecard method, the VC method working back from a target exit, and Berkus. Knowing the frameworks on the other side of the table lets you run a tighter process and read whether a term sheet is priced off real comps or a founder's optimism.
