Startup Equity Dilution Calculator
Track founder ownership across multiple funding rounds.
What is it?
This calculator tracks how a founder's (or any shareholder's) ownership percentage shrinks across multiple funding rounds, as new investors receive equity in exchange for their investment.
Formula
Post-Money = Pre-Money + New Investment
New Investor % = New Investment ÷ Post-Money
Your Ownership After = Your Ownership Before × (1 − New Investor %)
Formula Explanation
Each funding round creates new shares for the incoming investor, which dilutes everyone else's percentage ownership proportionally — the company is now "sliced" into more pieces, even though existing shareholders don't lose any of their actual shares. This compounds across rounds: dilution from Series A applies on top of dilution from the Seed round, and so on.
Example Calculation
A founder starting at 100% raises a Seed round at $40,000,000 pre-money for $10,000,000, diluting them to 80%. A later Series A at $150,000,000 pre-money for $50,000,000 dilutes them further to about 65% of the company.
How to Use
- Enter your starting ownership percentage (100% if this is a brand-new cap table).
- Add each funding round with its pre-money valuation and new investment amount.
- Add more rounds to see cumulative dilution across the company's full funding history.
- Review your ownership percentage and implied equity value after each round.
Benefits
- Models multiple rounds at once instead of calculating each round's dilution manually.
- Shows the implied dollar/rupee value of your stake at each round's valuation.
- Helps set realistic expectations about ownership before negotiating a term sheet.
Use Cases
- Founders modeling how much ownership they'll retain after planned future funding rounds.
- Employees with equity grants estimating how future rounds will dilute their stake.
- Comparing dilution impact of raising a smaller round at a lower valuation vs. a larger round at a higher valuation.
What Your Result Means
Your final ownership percentage reflects your slice of the company after all modeled rounds. The implied equity value multiplies that percentage by the most recent post-money valuation — useful for understanding your stake's paper value, though it isn't realized until an actual sale, IPO, or liquidity event.
Tips
- This simplified model doesn't include an option pool top-up, which many term sheets add before a new round — that would cause additional dilution beyond what's shown here.
- A higher valuation for the same investment amount always means less dilution — valuation matters as much as deal terms.
- Model multiple future scenarios (different valuations or raise sizes) to understand the dilution range you might face.
Common Mistakes
- Forgetting that option pool expansions before a round typically dilute existing shareholders beyond just the new investor's stake.
- Assuming ownership percentage translates directly to control — voting rights, board seats, and share classes also matter.
- Not accounting for convertible notes or SAFEs from earlier rounds, which convert into equity and cause additional dilution at the next priced round.
FAQs
Does dilution mean I lose shares?
No, you keep the same number of shares — dilution means new shares are created for investors, so your existing shares represent a smaller percentage of a now-larger total.
What is pre-money vs. post-money valuation?
Pre-money valuation is the company's value before the new investment is added; post-money valuation is pre-money plus the new investment — the new investor's ownership percentage is based on post-money.
Does this account for option pools?
No, this simplified model doesn't include option pool expansions, which many funding rounds require and which cause additional dilution beyond what's calculated here.
This is a simplified dilution model and does not account for option pool top-ups, convertible note conversions, liquidation preferences, or other cap table complexities common in real term sheets.
Last updated: July 26, 2026