3,112 Priced Rounds and Under 10% Above 30%: The analysis covers 3,112 primary priced rounds raised by US startups, excluding bridges and extensions. Fewer than 10% of software seed rounds in 2025 involved founders selling 30% or more of the company.

Seed to Series B Medians: 20% to 14%: Median dilution at seed sits at 20% for software and 21% for deep tech, then drops to 18% and 22% at Series A. By Series B, medians decline further to 14% in software and 16% in deep tech.

Only 3% With Liq Prefs Over 1x: Walker notes that aggressive terms are not replacing headline dilution. Just 3% of Seed and Series A deals in 2025 included liquidation preferences above 1x, suggesting market standards have tightened rather than shifted risk elsewhere.

USV Fund I: $125M Raised, $140M Deployed: USV Fund I raised $125M but only called $110M, then recycled early liquidity to ultimately deploy $140M. This approach offset management fees and increased effective capital invested without additional commitments from LPs.

3.0x Gross vs 2.1x Net Reality: A 3.0x gross fund often compresses to roughly a 2.1x net after fees and carry, despite LP underwriting targets of 3 to 5x net. Cambridge Associates data shows only the 2010 vintage reaching a top-quartile DPI above 3.0x net.

20% Recycling Can Lift Net to 2.8x: On a $100M fund, no recycling returns $212M to LPs with $28M in GP carry. Recycling 20% and generating a 5.0x return on that capital increases LP distributions to $276M and GP carry to $44M, all while maintaining the same 3.0x gross multiple.

Waterfall Structure: Return of Capital, Hurdle, 80/20 Split
The text walks through standard waterfall tiers, starting with full return of LP capital, followed by a preferred return, GP catch-up, and a final carried interest split that is commonly 80/20. It also contrasts whole-fund waterfalls with deal-by-deal models and explains how each shifts risk and timing of GP carry.

Liquidity Events: M&A, IPOs, Secondaries, Interest Income
Distributions are triggered by liquidity events such as acquisitions, IPO share sales, secondary transactions, or recurring interest in credit strategies. Carta notes that after five years, over 60% of 2019 vintage VC funds had not yet returned any capital, highlighting why distributions remain top of mind for LPs.

Execution Steps: 4 Operational Actions, 27+ LPs Median
Executing a distribution involves modeling the payout, issuing notices, sending payments, and updating the general ledger. Even sub-$25M funds typically manage around 27 LPs, which makes manual workflows error-prone and communication-heavy for emerging managers.

Team Size and Coverage: CS intensity peaks between $10M-$50M ARR, then compresses at $100M+. Early-stage companies over-invest in CS relative to headcount, while scaling firms optimize coverage with segmentation and tooling. Most teams staff based on customer count rather than revenue, with little correlation to renewal rates.

Reporting and P&L Placement: CS orgs report to a CCO, CRO, or COO roughly in a three-way split, reflecting varied priorities. Placement on the P&L is also fragmented, with some treating CS as a cost center, others as part of sales, and some splitting it across functions, creating inconsistent incentives and accountability.

Incentives vs. Outcomes: Nearly 80% of CSMs have less than 20% of pay as variable, while expansion revenue often sits with Account Managers. Metrics like NPS, usage, and adoption are common proxies, but compensation rarely moves renewal rates. Data shows product quality and customer fit drive retention more than CS comp structure.

IR Focus - Trust Over Time:
Investor relations is framed as a discipline that extends beyond fundraising. Consistent communication, transparency, and clear processes reinforce LP confidence and signal that the manager can operate at scale.

Fundraising as a Managed Process: Segmentation, prioritization, and a predictable cadence of touchpoints keep prospective LPs engaged without overwhelming them. Treating commitments operationally ensures smooth closes and preserves momentum through first close and beyond.

Evolving Expectations Across Funds: LP expectations shift from underwriting potential in Fund I to requiring consistent execution and scalable processes in later funds. By Fund III, formal reporting, repeatable decision-making, and institutionalized operations become essential.