Equity Dilution Calculator
How a funding round and option pool dilute founders and shareholders.
About this tool
Enter your current cap table (each shareholder and their shares), the pre-money valuation, the investment and, optionally, the option pool size investors want after the round. The tool shows the price per share, post-money valuation, the shares issued and everyone's ownership before and after.
How dilution works
When a startup raises money, it issues new shares to investors, so existing holders own a smaller percentage of a company that is (hopefully) worth more. The price per share is the pre-money valuation divided by the shares outstanding before the round. Investors own their investment divided by the post-money valuation (pre-money plus investment). For example, raising 2 million on an 8 million pre-money means investors own 20%, and everyone else is diluted by the same proportion: two founders with 40% each drop to 35.56% each. Investors often ask for the employee option pool to be created or topped up before the round, sized as a percentage of the post-money capitalisation. This is sometimes called the option pool shuffle. Because the new pool is counted in the pre-money, it comes entirely out of the existing holders and lowers the effective price per share. With a 10% post-money pool in the same deal, each founder ends at 31.11% instead of 35.56%. That's why founders negotiate the pool size, not just the headline valuation. Over several rounds, dilution compounds, so model each one in turn. Honest limits: SAFEs and convertible notes converting at a discount or cap, liquidation preferences, anti-dilution clauses, vesting and secondary sales aren't modelled. Your lawyer's cap table is the record. This isn't financial or legal advice. The startup valuation calculator, the runway calculator and the SaaS metrics calculator are related.
Frequently asked questions
How do you calculate dilution?
New investor ownership = investment รท post-money valuation. Existing holders keep their shares but their percentage shrinks by the same proportion.
What is the option pool shuffle?
Creating or enlarging the employee option pool before a round, so its dilution falls only on existing shareholders and the effective price is lower.
How much dilution is normal per round?
Often 15โ25% at seed and Series A, though it varies widely with valuation and market.
Is anything stored?
No. Calculations run in your browser and nothing is stored or sent.