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:

Worked example: a $1M seed 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.

Step 1
Add 2-3 founders with their starting equity (e.g., 50% each)
Step 2
Add a funding round with amount and pre-money valuation
Step 3
See how ownership changes and share with cofounders
Saved locally
Founders
Funding Rounds
Saved Scenarios
Pro Tips
Industry Standard: Most seed-stage companies raise 2-4 rounds before reaching Series A. Aim to keep dilution under 50% by your first priced round.
Option Pool Size: Typical option pools are 10-20% at each round. Be strategic — a large pool at an early round dilutes you more.
Post-Money vs Pre-Money: Investors quote pre-money, but they're really buying a percentage of post-money. If someone offers $2M on $8M pre-money, they get 20% post-money.
Liquidation Preference: Standard is 1x non-participating preferred. Negotiate for 1x — liquidation preferences above 1x can significantly reduce your exit proceeds.
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Your Starting %
Your Final %
Total Dilution
Final Post-Money

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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