How is equity dilution calculated?
Dilution happens because a funding round issues new shares to investors rather than transferring existing ones, so every current shareholder owns a smaller slice of a larger pie. After a priced round your ownership is:
Your ownership after the round = your shares ÷ (your shares + new shares issued)
The new shares are set by the round's terms:
- Price per share = pre-money valuation ÷ total pre-round shares
- New shares issued = investment amount ÷ price per share
- Investor ownership = investment ÷ post-money valuation (pre-money + investment)
Worked example: a $1M seed round
- A founder holds 1,000,000 shares — 100% of the company.
- She raises $1,000,000 at a $4,000,000 pre-money valuation ($5M post-money).
- The investor receives $1M ÷ $5M = 20% of the company.
- The founder keeps 80% — she was diluted by 20 percentage points in a single round.
Repeat this for each round (pre-seed through Series C) and the optional employee option pool to model cumulative dilution in the calculator below.
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Ownership Across Rounds
See how each stakeholder's equity evolves after every round.
Detailed Cap Table
Full breakdown of ownership, shares, and valuations at each stage.
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Equity Dilution FAQ
Quick answers to the most common dilution questions.
How much equity do founders lose per funding round?
Typically 15–25% per round. A seed or Series A round usually sells 15–25% of the company, so every founder's stake shrinks by roughly that fraction. Across pre-seed, seed, A, B, and C, the founding team often ends up holding 10–25% combined by exit.
Does an employee option pool dilute the founders?
Yes. A new option pool is usually created or topped up as part of a priced round. If the pool is created before the investment closes, the founders absorb that dilution rather than the incoming investors. This calculator lets you add an option pool to see the exact effect.
What is the difference between pre-money and post-money valuation?
Pre-money is what the company is worth before the new cash; post-money is pre-money plus the investment. The investor's ownership equals investment ÷ post-money — so a $1M investment at a $4M pre-money valuation ($5M post-money) buys 20%.
Is my cap-table data sent anywhere?
No. Every calculation runs entirely in your browser. Nothing about your cap table is uploaded to a server or stored anywhere.
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