When a pitch has reached 100% of its funding target the business may choose to overfund. This is where the company can choose to accept further investment in exchange for releasing more equity. Businesses are not required to accept further investment once their funding target has been reached. Anyone who invests while a business is overfunding has exactly the same rights as those who invested before overfunding.
When a business accepts additional investment through overfunding, additional equity in the business will be released. For example, a company that initially offered 10% equity in exchange for an initial funding target of £100,000 will need to release additional equity to support overfunding as follows:
Amount raised | Equity released
£100,000 (target) 10%
£150,000 (overfund) 14.29%
£200,000 (overfund) 18.18%