Startup Dilution Calculator
What a priced round does to your ownership, including the option pool most founders forget.
The option pool is modelled the way term sheets almost always write it: carved out of the pre-money, so existing holders absorb it and the incoming investor does not. That is why your dilution here is 30.0% rather than the investor’s 20.0%. Founders regularly miss this and are surprised by the cap table after closing.
A priced round adds new shares, so everyone already on the cap table owns a smaller slice of a larger company. Post-money valuation is pre-money plus the investment, and the investor’s share is their cheque divided by the post-money.
Worked example. Raise $2,000,000 on an $8,000,000 pre-money and the post-money is $10,000,000, so the investor takes 20%. A founder holding 60% now holds 48%.
Frequently asked questions
Why does the option pool dilute only existing shareholders?
Because it is created in the pre-money, before the investment lands. The convention exists because the pool funds hires who will grow the company for everyone, and investors argue existing holders should fund it. It is a negotiable term, and the size of the pool is often more negotiable than the valuation.
Is dilution bad?
Not by itself. A smaller share of a much more valuable company is the point of raising. What matters is whether the capital buys enough growth to more than offset the ownership given up, and that is a judgement, not arithmetic.
What about pro rata rights?
Existing investors with pro rata rights can buy enough of the new round to maintain their percentage, which means their dilution falls and everyone else’s rises. This calculator models a single new investor; a real cap table with participating insiders needs the full share count.
How much do founders typically own after a Series A?
There is enormous variation, but founders collectively holding 40 to 60% after a Series A is a common range. Each subsequent round dilutes further, which is why the ownership question is really about how many rounds you expect to raise.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.