Equity Dilution Calculator

How to Use This Calculator

1. Enter Current Founder Ownership %, Investment Amount, and Pre-Money Valuation.
2. Post-money valuation, investor share, and founder dilution appear instantly.
3. Use Multiple Rounds to model Seed → Series A → Series B dilution.
4. Use Option Pool to add pre-money pool top-ups.
5. Switch to Professional for exit waterfall and liquidation preference analysis.

Formula

Example

Frequently Asked Questions

• What is equity dilution? ▼
  Equity dilution occurs when a company issues new shares (to investors, employees, or advisors), reducing existing shareholders' ownership percentage. If you own 70% and issue 20% to new investors, you now own 70% × (1 − 20%) = 56%.
• What is pre-money vs post-money valuation? ▼
  Pre-money valuation is the company's value before the investment. Post-money = pre-money + investment. If pre-money is $8M and you raise $2M, post-money is $10M — and the investor owns $2M / $10M = 20%.
• What is an option pool and how does it affect dilution? ▼
  An option pool is equity reserved for future employee grants (typically 10–20% of post-money). Investors usually require the pool to be created pre-money (from existing shareholders), which means founders bear the dilution before the round closes.
• What is a liquidation preference? ▼
  A liquidation preference guarantees investors receive their money back (often 1× the investment, sometimes 2×) before other shareholders receive anything in an exit. A 1× non-participating preference on $2M means investors get $2M first, then remaining proceeds are distributed pro-rata.
• How much dilution is normal per round? ▼
  Seed: 10–20%. Series A: 15–25%. Series B: 10–20%. After Seed + A + B, founders typically own 40–60%. Below 30–35% cumulative founder ownership starts to affect incentives, and VCs generally prefer founders to retain meaningful equity.

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