Skip to content
Businessstartup

Startup Equity Dilution Calculator

What a funding round does to your stake, separating the dilution from the new investors from the dilution from the option pool. A pool created pre-money comes entirely out of the existing holders, and that detail moves a founder stake by several points while the headline terms look unchanged.

Also called: startup dilution calculator, founder equity calculator.

%
$
$
%
When the pool is created
%
Your stake after this round
14%

14% after the round, down from 20%. The 10% pool was created pre-money, so it came out of the existing holders alone and cost you 2 points on top of the 4 the investors took. Created post-money it would have been shared with them. After 2 further rounds at 18% each your stake would be 9.41%. Dilution compounds, so it does not subtract to -22%.

Diluted by the new investors
4%
Diluted by the option pool
2%
The new investors
20%
Post-money valuation
$100,000,000.00
Value of your stake after
$14,000,000.00
Value of your stake before
$16,000,000.00
Your stake after the further rounds
9.41%
On the option pool
The 10% pool was created pre-money, so it came out of the existing holders alone and cost you 2 points on top of the 4 the investors took. Created post-money it would have been shared with them.
On later rounds
After 2 further rounds at 18% each your stake would be 9.41%. Dilution compounds, so it does not subtract to -22%.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Your stake over the rounds

Hover or drag for values
$0.00$5.00$10.00$15.00$20.00Round 0Round 3
Your stake %

Through the rounds

RoundYour stakeValue of your stake
Now20%$16,000,000
After this round14%$14,000,000
Round +111.48%$22,960,000
Round +29.41%$37,654,400
Method and background

How this is calculated

The investors take a share equal to their money over the post-money valuation, and everyone existing is scaled down by what remains. The option pool is where the negotiation actually happens. Created pre-money, it is carved out of the existing holders before the investors arrive, so the investors keep their full percentage and the founders absorb the whole pool. Created post-money, everyone including the new investors is diluted by it. The terms sheet often reads identically either way, and the difference on a ten percent pool is roughly two points of founder stake. Later rounds compound: three rounds at eighteen percent each leave you with just over half of what you started with, not forty six percent less.

your share is scaled by the fraction of the company the existing holders still own, and a pre-money pool comes out of that fraction before the investors arrive
s
Your stake
V pre
Pre-money valuation
I
Investment

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a 20 point stake through a 20 on 80 round

Your stake now
20%
Pre-money valuation
$80,000,000.00
New investment
$20,000,000.00
Option pool created in the round
10%
When the pool is created
Pre-money, which dilutes existing holders only
Further rounds to model
2
Dilution in each further round
18%

Your stake after this round14%

20% x (1 - 0.10/0.8) x 0.8

Open this example

the same pool created post-money

Your stake now
20%
Pre-money valuation
$80,000,000.00
New investment
$20,000,000.00
Option pool created in the round
10%
When the pool is created
Post-money, which dilutes everyone
Further rounds to model
0
Dilution in each further round
18%

Your stake after this round14.4%

boundary: the same terms, 0.4 points of founder stake different

Open this example

Method and limits

What it assumes

  • A single class of shares with no liquidation preference modelled.

What it deliberately does not model

  • Preferences, participation and anti-dilution provisions change the economics far more than the percentages here.
  • A percentage of a larger company can be worth more than a larger percentage of a smaller one, which is the point of taking the money.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

What is the pre-money option pool shuffle?
Creating the pool before the investment, so it comes out of the existing holders alone. The investors keep their full percentage and the founders absorb the whole pool. It is standard, and it is worth pricing rather than accepting silently.
Is dilution bad?
Not by itself. A smaller share of a company worth far more is the whole point of raising. The page shows the value of your stake before and after for exactly that reason.