That doesn't make sense for the founders, though. It would be in their interest to take as little money as possible early on, so that they give up less of the

That doesn't make sense for the founders, though. It would be in their interest to take as little money as possible early on, so that they give up less of the company's equity. Then - later when the business model has proven itself - and the valuation is higher - take on additional capital. You'll be giving up much more equity if you take a million in funding in the first round, instead of the third.