Equity Funding: Angels, Venture Capital, and Crowdfunding
Sell a share of your company to fund the growth your other layers cannot cover.
What is Equity?
Equity funding means raising money by selling a piece of your company. Investors give you cash today in exchange for ownership and a share of the future upside. It is the engine behind most high-growth startups, and for good reason. It is patient, it does not have to be repaid like a loan, and the right investors bring networks, credibility, and advice.
Equity comes in several forms. Angel investors are individuals who back very early companies. Venture capital funds invest larger amounts as you grow. Equity crowdfunding lets many smaller investors, including your own customers and community, buy a stake online. Early rounds are often raised on simple instruments like a SAFE or a convertible note, which convert into shares later, while priced rounds set a valuation and sell shares directly.
Equity is the right tool for big, ambitious swings: building something capital-intensive, moving fast in a winner-take-most market, or funding work no grant or loan will cover. The one catch is dilution. Every share you sell is ownership you no longer have. That is why Grantverse treats equity as the final layer of the capital stack. You fill the eleven non-dilutive layers first, then raise equity only for what they cannot cover, so you sell less of your company to reach the same goal.
How it works
- 1You decide how much to raise and for what, then set a valuation or use a SAFE or convertible note that prices the round later.
- 2You pitch investors, whether angels, venture funds, or a crowd of smaller backers on an equity crowdfunding platform.
- 3Investors who commit send the money in exchange for shares, or for the right to shares once a note or SAFE converts.
- 4In return, you give up a percentage of ownership. A single priced round commonly sells somewhere in the range of 10% to 25% of the company, though it varies a lot.
- 5Investors share in the upside when the company is acquired, goes public, or buys them out. Many also take a board seat or information rights.
Why founders use it
- No repayment schedule, because unlike debt, equity does not have to be paid back on a timeline, which frees up cash for growth.
- Large amounts available, since venture capital can fund ambitions far bigger than most non-dilutive layers can reach on their own.
- Smart money, as strong investors bring introductions, hiring help, credibility, and strategic guidance.
- Aligned incentives, because investors only win when you win, so good ones are motivated to help you grow.
- Crowdfunding can double as marketing, turning customers and fans into invested owners and advocates.
Best for
- Startups chasing a large market where speed and scale decide the winner, and where moving slowly is the real risk.
- Capital-intensive work, like deep tech, hardware, or biotech, that grants and revenue alone cannot fund fast enough.
- Founders comfortable trading some ownership and control for growth, and ready for the accountability investors expect.
Things to weigh
- Dilution is permanent. Every round sells a piece of your company, and it compounds across rounds, so founders can end up owning a small fraction at exit.
- You give up some control. Investors may take board seats, voting rights, and a say in big decisions.
- It sets expectations. Venture investors need a large exit to make their model work, which can push you toward growth at all costs even when a steadier path would suit you better.
- Raising takes time and is not guaranteed. A round can absorb months of founder focus, and many startups never close one.
Typical terms at a glance
- Typical amount
- From tens of thousands (angels) to millions (venture rounds); US equity crowdfunding allows up to $5M per year under Regulation CF
- Cost / terms
- Paid in ownership, not interest. A priced round commonly sells about 10% to 25% of the company; often via SAFE, convertible note, or priced shares
Ranges are general guidance for orientation, not quotes. Real terms vary by provider, country, and your profile.
How Grantverse helps with equity
Grantverse first fills your non-dilutive layers so you know the smallest equity check you actually need, then helps you size that raise and surfaces investors whose thesis fits your stage and sector, with honest signals about likely fit.
Frequently asked questions
Is equity funding dilutive?
Yes. Equity is the one dilutive layer in the capital stack. You raise money by selling ownership, so your share of the company shrinks. That is why it is worth filling the non-dilutive layers first and raising only what they cannot cover.
How much equity do startups usually give up in a round?
It varies widely, but a single priced round commonly sells somewhere in the range of 10% to 25% of the company. Dilution then compounds across future rounds, which is why minimizing how much you raise protects your ownership.
What is the difference between a SAFE and a convertible note?
Both let you raise early money that converts into shares later. A convertible note is debt with an interest rate and a maturity date, while a SAFE is simpler and is not a loan, so it has no interest or maturity. SAFEs have become the most common early-stage instrument in the US.
What is equity crowdfunding?
Equity crowdfunding lets many smaller investors buy a stake in your company online, often including your own customers. In the US, Regulation Crowdfunding lets a company raise up to $5 million per year this way, and the UK has platforms like Crowdcube and Republic Europe.
Should I raise equity first or last?
Grantverse's view is last. Equity is powerful but permanent, so fill the non-dilutive layers (grants, credits, loans, revenue-based financing, and more) first, then raise equity only for the gap they cannot fill. You reach the same goal while keeping more of your company.