Startup Dilution Calculator (Funding Round Ownership)
Enter the pre-money valuation, the investment and the option pool.
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Startup Dilution Calculator (Funding Round Ownership) by TheCalcTools
How the Startup Dilution Calculator (Funding Round Ownership) works
Post-money valuation = pre-money + investment, and the investor owns investment ÷ post-money. Existing shareholders are diluted by that share plus any new option pool created in the round.
Investors often require the pool to come out of the pre-money valuation (the ‘option pool shuffle’), which falls entirely on existing holders, as modelled here.
The formula
Worked example
Using the default values shown in the calculator:
| Pre-money valuation | $8e+06 |
|---|---|
| Investment | $2e+06 |
| New option pool (% of post-money) | 10 % |
| Your ownership before the round | 40 % |
- 8M pre-money + 2M = $10,000,000 post-money; the investor owns 20.00%.
- With a 10% pool, 40% becomes 28.00%, worth $2,800,000.
Result:
| Post-money valuation | $10,000,000 |
|---|---|
| Investor ownership | 20.00% |
| Your ownership after the round | 28.00% |
| Value of your stake at post-money | $2,800,000 |
| Dilution | 30.0% |
Frequently asked questions
Is dilution bad?
Not if the money grows the company: a smaller slice of a much bigger company can be worth more.
Sources and further reading
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.