What is normal dilution for Series A?

Series A rounds typically dilute founders by 15-25%. The standard range is 20% equity to investors. If you're being asked for more than 25%, you may want to negotiate or consider whether the valuation is fair.

What's the difference between pre-money and post-money valuation?

Pre-money valuation is your company's value before the investment. Post-money = Pre-money + Investment. If an investor puts in $1M for 20%, post-money is $5M ($1M / 20%), and pre-money is $4M ($5M - $1M).

How does an option pool affect dilution?

Option pools are typically created from pre-money shares, meaning founders bear the dilution before investors come in. A 15% option pool on top of 20% investor equity means founders are diluted by 35%, not 20%. Always negotiate who bears option pool dilution.

How much equity should founders have after Series A?

After Series A, founders typically retain 50-70% combined ownership. After seed (10-20% dilution) and Series A (15-25% dilution), a solo founder might have 55-75% left. Co-founders split this amount based on their original equity split.

What is anti-dilution protection?

Anti-dilution provisions protect investors if you raise a future round at a lower valuation (down round). Full ratchet adjusts their price to the new price; weighted average is more founder-friendly, adjusting based on round sizes. This mainly affects preferred shareholders.

Should I minimize dilution at all costs?

Not necessarily. Taking more dilution from a strategic investor who adds significant value (customers, expertise, connections) can be worth it. A smaller slice of a much bigger pie is often better. Focus on building company value, not just minimizing dilution percentage.

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Equity Dilution Calculator

Calculate founder dilution after funding rounds. See pre/post-money valuation, new shares issued, and ownership changes for seed, Series A, and beyond.

Quick Funding Scenarios

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How to Calculate Startup Equity Dilution

Equity dilution is a critical concept for founders and investors. Our equity dilution calculator shows exactly how funding rounds impact ownership percentages. Calculate pre-money and post-money valuations, see new shares issued, and understand how your stake changes after seed rounds, Series A, and beyond.

What Is Equity Dilution in Startups?

Equity dilution occurs when a company issues new shares, reducing existing shareholders' ownership percentages. When a startup raises funding, new shares are created for investors. While your number of shares stays the same, your percentage of the total decreases. For example, if you own 100% of 1M shares and issue 250K new shares to investors, you now own 80% of 1.25M shares.

Dilution Formula

Dilution % = (New Shares / Total Shares After) × 100

Why Calculate Your Dilution?

Negotiate Better Terms

Understand exactly how much equity you're giving up before signing term sheets.

Plan Future Rounds

Model multiple funding scenarios to maintain control through Series A, B, and beyond.

Set Valuation Expectations

Calculate the pre-money valuation implied by any investment offer.

Account for Option Pools

See how employee stock option pools affect founder dilution before closing.

Compare Investor Offers

Quickly analyze different term sheets to find the best deal for founders.

How to Use the Dilution Calculator

Common Use Cases

Seed Round Planning

Model how raising $500K-$2M affects founder ownership before approaching investors.

Series A Negotiation

Calculate dilution from lead investor term sheets and understand valuation implications.

Employee Option Pool

See how creating a 10-15% option pool before funding impacts existing shareholders.

Multiple Round Modeling

Project ownership through several funding rounds to ensure founders maintain meaningful stakes.

Co-Founder Discussions

Show co-founders exactly how proposed funding affects everyone's equity.

Investor Presentations

Create clear cap tables showing post-money ownership distribution.

Frequently Asked Questions

Dilution % = (New Shares Issued / Total Shares After) × 100. For example, if you have 1M shares and issue 250K new shares: 250K / 1.25M × 100 = 20% dilution. Your ownership goes from 100% to 80%, a 20% dilution of your stake.

How to Calculate Startup Equity Dilution

What Is Equity Dilution in Startups?

Dilution Formula

Dilution % = (New Shares / Total Shares After) × 100