How Important Is It That Founders Have Over 50% Equity?

I think the question implies that the founders need to protect themselves from getting screwed, so having 51% ownership means they can't be outvoted.

Let's say you start with 51%.  Then you raise money and over time your stake is diluted to 20%.  What are you going to do?

Here's the reality: There is always the possibility that someone is going to screw you over.

Shit happens, but...

The best defense is just focus on running the business:

  • Execute your plan
  • Meet or, better yet, beat your milestones
  • Make your investors a lot of money

Make people money and they are not going to want to get rid of you.  It's as simple as that. 

Oh, one more thing.  Choose good investors if you have the choice.  You can check the reputation of your investors. 

Don't just choose the one that gives you the best valuation.  Choose investors that are going to have your back when times get tough. 

That's the best defense against you can have against getting screwed over.

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