// form styles

Equity Data Pulse June 2024

4th July 2024
Joe Brennan
Content and Communications Lead
Thumbnail image for company category
Jump to:

Welcome to June's Equity Data Pulse. We've tracked ownership of key stakeholder groups – founders, investors and employees – a few times in previous editions. This time, we'll look at how ownership stakes (and, therefore, companies' cap tables) changed across the first half of 2024. We'll also cover June's funding data and look at some of the industries standing out from a fundraising perspective.


Employee equity reduced slightly in Q2, while founders' equity stakes increased

Monitoring the ownership stakes of employees, investors and founders across the first half of this year, we find that on average, employee ownership reduced in Q2 compared to Q1, as did investor ownership. Meanwhile, founder ownership increased in Q2.

You might look at this chart and think '43% seems high for founder equity'. The relatively high levels of founder ownership shown here reflect the fact that in the startup and scaleup ecosystem there is a higher absolute number of early-stage companies, where founders generally enjoy larger equity stakes. Dealroom data indicates that only 20-30% of seed-stage companies raise Series A funding, and the total pool of companies at later funding stages reduces by around 50%. This means that there are fewer companies in total at later stages, when founder ownership is more heavily diluted.

So why is employee equity trending downward? There is evidence that in an environment of higher interest rates, where capital is relatively harder to raise, companies are reducing the amount of equity granted to employees. While attracting top talent is still important, if employees are more likely to be incentivised by a higher salary rather than by stock options, companies may elect to optimise compensation around base salary rather than by offering higher equity grants.

New funding rounds dropped again in June after an uptick in May

After May showed a 25% increase in the number of new funding rounds logged on Ledgy, June data reveals that new funding rounds declined again on a month-on-month basis:

Overall, more capital is being channelled to fewer companies that are raising larger rounds. Pitchbook data suggests that the average European funding round in Q1 2024 was €6.79 million, significantly higher than the average deal size of €5.1 million in Q4 2023 despite the total number of funding rounds being 13% lower in Q1 (2,398) compared to Q4 2023 (2,759).

European fundraising trends appear reasonably solid, though. In June, 76% of funding rounds came from companies in Europe, up from May where 66% of logged funding rounds were raised by European businesses.

Tracking the top industries for fundraising in H1 2024

Amid this fundraising activity, which industries have stood out? Below are the top five verticals by cash raised in the first two quarters of this year:

Ledgy's data indicates that cybersecurity was the most successful vertical for capital raising across Q1 and Q2, with transport, fintech, SaaS and healthcare rounding out the top five. With more attention being paid to corporate and security amid geopolitical uncertainty, it's no surprise that cybersecurity funding is so resilient. Crunchbase suggests that Q1 fundraising for cybersecurity startups and scaleups was 69% higher than Q4 2023.

Any equity data questions? Chat with Ledgy

Thanks for reading the Equity Data Pulse, your monthly digest of European equity trends. Did any of our findings surprise you? What's your experience owning equity as a founder or employee? And is there a piece of data you'd love us to dig into? Drop us an email and let's chat!

Get the Equity Data Pulse in your inbox
Subscribe to the Equity Data Pulse to get the latest insights from the European tech ecosystem.
Subscribe now

Let us show you more

Let’s schedule a demo to discuss your needs and show you how Ledgy solves them
Joe is Ledgy’s Content and Communications Lead. He has over a decade's experience working in marketing and communications for scaling tech companies and global professional services firms.

Stay up to date! 🎉

Subscribe to our newsletter and receive the latest insights on the equity world