Ownership / Check Size Target
Learn how the Ownership Target method derives valuation from European investor ownership norms and typical check sizes per stage.
How It Works
The Ownership Target method is the simplest valuation approach: it derives valuation directly from the investment amount and the ownership percentage the investor expects. Post-Money Valuation = Investment Amount ÷ Target Ownership Percentage. Pre-Money Valuation = Post-Money − Investment Amount. For example, if an investor puts in EUR 500K for 20% ownership, the post-money valuation is EUR 2.5M and the pre-money is EUR 2M. The method reflects how many early-stage deals actually get priced — based on what the investor wants to own, not on a financial model.
When It's Useful
Use the Ownership Target method at any stage when you want to understand the implied valuation of a specific investment offer, or when modeling different fundraising scenarios. It is the most practical method for founders in active fundraising — you know how much you are raising and can research typical ownership ranges for your stage. It works as a reality check alongside other methods: if a DCF or Revenue Multiple gives a very different answer than what investors typically pay for a given ownership stake, it highlights a disconnect worth investigating.
European Context
While the Ownership Target method has low geographic sensitivity (it is primarily a mathematical relationship between investment and ownership), European ownership norms differ from US patterns. European investors typically take slightly more ownership at early stages: pre-seed rounds see 10–20% dilution, seed rounds average 19.5% median dilution (15–25% range), and Series A rounds typically involve 18–25% dilution. These norms reflect the European funding landscape where capital is scarcer and investors seek stronger protection. Understanding these norms helps founders evaluate whether a proposed valuation implies reasonable or excessive dilution by European standards.
Key Parameters
10–20%
19.5%
15–25%
18–25%
Example
A seed-stage startup raises EUR 750K. The investor targets 20% ownership (within the European 15–25% seed range). Post-Money = EUR 750K ÷ 0.20 = EUR 3,750,000. Pre-Money = EUR 3,750K − EUR 750K = EUR 3,000,000.