About the Equity Dilution Calculator
This equity dilution calculator shows how a priced funding round changes who owns your startup. Enter the fully diluted shares outstanding today, how many of them you hold, the pre-money valuation, the amount being raised and the size of any new employee option pool, and it returns your ownership before and after the round, the investor’s stake, the price per share and how many new shares are created.
It is built for founders reviewing a term sheet, early employees trying to understand what a raise means for their options, and angels modelling follow-on rounds. The option pool setting matters: most venture term sheets require the pool to be created in the pre-money valuation (the “option pool shuffle”), which dilutes only existing holders. Switch to a post-money pool to see the difference.
The model covers a single priced equity round with no convertible notes or SAFEs converting at the same time and no anti-dilution adjustments. Use the convertible note or SAFE calculators first if you have instruments converting in this round.
With the default inputs, the your ownership after the round is 56%. Change any value above to recalculate instantly.
How to use the equity dilution calculator
- 1Enter the fully diluted share count today and how many of those shares you own.
- 2Enter the pre-money valuation and the amount being raised from the term sheet.
- 3Enter the new option pool the investors require, as a % of post-money.
- 4Choose whether the pool is created before (typical) or after the round.
- 5Review your post-round ownership, price per share and the cap table breakdown.
Formula and method
In a priced round the new investor buys a percentage equal to the investment divided by the post-money valuation. When the term sheet requires a new option pool “in the pre-money”, the pool and the investor stake are both carved out before existing holders are counted, so existing shares must equal (1 − investor % − pool %) of the new total. The price per share is the post-money valuation divided by all fully diluted shares.
With a post-money pool the investor’s shares are priced first (price = post-money ÷ shares excluding the pool) and the pool is added afterwards, diluting everyone including the new investor. Dilution is shown as the relative drop in your percentage: going from 80% to 56% is a 30% dilution.
- Pre-money
- Agreed value of the company before new money comes in
- Post-money
- Pre-money valuation plus the new investment
- Pool %
- New unallocated option pool as a share of post-money fully diluted shares
Worked examples
$2M seed at $8M pre with a 10% pre-money pool
Investors get $2M ÷ $10M = 20% and the pool takes 10%, leaving 70% for existing holders. Total shares become 10,000,000 ÷ 0.70 ≈ 14.29M, so your 8M shares fall from 80% to 56% and the price per share is $10M ÷ 14.29M = $0.70.
Same round with the pool created after the money
Pricing the shares before the pool is added gives $10M ÷ 12.5M = $0.80 per share and 2.5M investor shares. Adding a 10% pool afterwards dilutes everyone, so you end with 57.6% instead of 56% and the investor ends with 18%.
Two equal founders, $1M at $4M pre, no new pool
Raising $1M at $4M pre sells 20% of the company. Each founder’s 50% becomes 40% — a 20% dilution — and 2.5M new shares are issued at $0.40.
Frequently asked questions
How much dilution is normal in a seed or Series A round?+
Many founders sell somewhere around 15–25% of the company per priced round, and a new or topped-up option pool often adds several more points. The right amount depends on how much capital you need to reach the next milestone.
What is the option pool shuffle?+
It is the practice of requiring the new option pool to be created inside the pre-money valuation. The pool then dilutes only existing shareholders, which effectively lowers the true pre-money valuation the founders receive.
Does dilution mean my shares are worth less?+
Not necessarily. You own a smaller percentage, but if the round is priced above what your shares were worth before, the value of your stake can rise. Dilution is only value-destroying when the round price is lower than prior value, as in a down round.
What does fully diluted shares mean?+
Fully diluted shares count every share that exists or could exist from current commitments: common and preferred stock, granted options and warrants, and the unallocated option pool. Investors price rounds on a fully diluted basis.
How do convertible notes and SAFEs affect dilution?+
They convert into shares at or around the priced round, usually at a discount or capped price, which adds more new shares and dilutes existing holders further. Model their conversion separately and add the resulting shares to the pre-round count.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.