What is pre-money and post-money valuation?

Pre-money valuation is the company's value before receiving investment. Post-money = pre-money + investment amount. A $2M investment at a $8M pre-money valuation gives a $10M post-money valuation, meaning the investor owns 20% ($2M/$10M).

How much dilution is normal per funding round?

Typical dilution: Angel/Pre-seed: 5–15%. Seed round: 15–25%. Series A: 15–25%. Series B: 10–20%. Founders typically retain 10–30% by the time a company goes public after multiple rounds.

What is an option pool and why does it dilute founders?

An option pool (ESOP) is a reserved block of shares for employee equity compensation. Investors typically require a 10–20% option pool before a round is closed — this is created from existing shares, primarily diluting founders before investor money comes in.

How do I minimize dilution?

Raise at higher valuations (less dilution per dollar), raise only what you need, grow fast to justify higher valuations at each subsequent round, and negotiate option pool shuffles (some of the pool can come from post-money).

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Free Equity Dilution Calculator — Startup Founder Ownership After Funding

Equity dilution is the reduction in existing shareholders' ownership percentage when new shares are issued. This calculator models founder dilution through funding rounds — showing pre-money and post-money ownership for founders, investors, and option pool, across up to 4 rounds from pre-seed to Series B.

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How It Works

How to use Startup Equity Dilution Calculator

Enter starting ownership

Input founder shares and any existing shareholder percentages before any funding.

Add funding rounds

For each round, enter investment amount, pre-money valuation, and option pool percentage if applicable.

See dilution table

The calculator shows ownership percentage for each party after each round, and cumulative dilution.

FAQ

Frequently asked questions

Equity dilution reduces existing shareholders' ownership percentage when new shares are issued. A founder who owns 100% of a company that issues 25% to an investor now owns 75% — their percentage dropped (diluted) even though the number of their shares did not change.

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Free Equity Dilution Calculator — Startup Founder Ownership After Funding

How to use Startup Equity Dilution Calculator

Frequently asked questions

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