Equity Dilution Calculator
How much equity do founders keep after raising capital? Model single rounds, multi-round waterfall dilution, and the hidden cost of option pools. Works with any currency.
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How to Use This Calculator
Tab "Single Round"
Enter the pre-money valuation and investment amount. The calculator shows the post-money valuation, investor ownership percentage, and how much founder equity is diluted. This models a simple priced equity round with one investor.
Tab "Multi-Round"
Add up to 5 funding rounds with a round name, pre-money valuation, and amount raised. The waterfall table shows how founder ownership decreases after each round, with progressive dilution from 100% down to the final percentage.
Tab "Option Pool Impact"
Enter the option pool size (typically 10-20%), pre-money valuation, and investment amount. See how creating the option pool before the round dilutes founders more than investors — a critical detail that many first-time founders miss.
The Formulas
Post-money = Pre-money + Investment
Investor ownership:
Investor % = Investment / Post-money
Founder ownership after a round:
Founder new % = Old % × (Pre-money / Post-money)
Multi-round dilution (compounds):
Final % = 100% × (Pre₁ / Post₁) × (Pre₂ / Post₂) × …
With option pool (created pre-money):
Founder % = Old % × (1 − Pool%) × (Pre-money / Post-money)
All calculations are universal. No country-specific tax or legal rules are applied. Results are estimates — consult a lawyer for your specific cap table.
Worked Examples
Example 1 — Solo founder raises $1M at $4M pre-money
A solo founder with 100% ownership raises $1,000,000 at a $4,000,000 pre-money valuation.
The founder keeps 80% of the company. The investor gets 20% for their $1M investment, and the company is now valued at $5M post-money.
Example 2 — Three rounds of "only 20%" dilution each
A founder raises three consecutive rounds, each time giving up 20% to new investors. Many founders assume they lose 60% total — but dilution compounds.
After three rounds of "only 20%" dilution each, the founder retains 51.2% — not 40%. Dilution compounds multiplicatively, not additively. The founder barely holds a majority.
Example 3 — 15% option pool before Series A
An investor requires a 15% option pool created before the Series A round. The founder has 80% after the Seed. Pre-money is $4M, investment is $1M.
The 15% option pool carved from pre-money costs the founder an extra 9.6 percentage points. The investor still gets their 20% regardless — the pool dilution falls entirely on existing shareholders. This is why option pool placement (pre vs. post-money) is one of the most important negotiation points in a term sheet.
Understanding Equity Dilution
Why does dilution compound instead of adding up?
Each new round dilutes your current ownership, not your original 100%. If you own 80% and give up 20% of the company, you lose 20% of 80% (= 16 percentage points), leaving you with 64%. This is multiplicative: 80% × 80% = 64%, not 80% − 20% = 60%. Over multiple rounds, the difference between multiplicative and additive dilution becomes very significant.
What is a cap table and why does it matter?
A capitalization (cap) table is the spreadsheet that tracks who owns what percentage of a company, including founders, investors, employees with options, and any other shareholders. It matters because it determines who controls the company, who gets paid in an exit, and how future rounds affect everyone. This calculator models the founder row of your cap table across rounds.
Should the option pool be created pre-money or post-money?
Investors almost always push for pre-money option pools because it means existing shareholders (founders) bear the dilution, not the new investors. If the pool is created post-money, the dilution is shared equally among all shareholders including the new investors. Founders should negotiate for the smallest pool that meets near-term hiring needs — typically enough options for 12-18 months of hires — rather than accepting a default 20%.
What is anti-dilution protection?
Anti-dilution provisions protect investors if the company raises a future round at a lower valuation (a “down round”). The most common type is “broad-based weighted average” anti-dilution, which adjusts the investor’s conversion price to partially compensate for the lower valuation. “Full ratchet” anti-dilution is more aggressive and reprices all previous shares to the new lower price. Both types increase founder dilution in a down round.
How much dilution is normal per round?
Typical dilution per round: Pre-seed 10-20%, Seed 15-25%, Series A 20-30%, Series B 15-25%. Later rounds (C, D) tend to dilute less (10-20%) because the company is more valuable. Founders raising at higher valuations dilute less per dollar raised. A “good” fundraise minimizes dilution while raising enough to hit the next milestone that justifies a higher valuation.