For startups, funding and capital raising are continuous processes. As the company grows, expansion requirements erode capital. For this reason the company finds itself raising more than one round of external finance. During the different rounds, the complexity of the deal raises as well as the valuation. More mature companies will have the cash flow and the soft attributes to justify such valuations and allow them to raise millions in equity funding without exchanging the whole remaining equity of the founders.

The founders will retain smaller percentages of equity that, due to the valuation, are however worth much more. The typical (if it exists) funding roadmap of a successful startup is summarized perfectly by this video, created by Enjoy!