How to Use Dilution Calculator
The Dilution Calculator takes a series of funding rounds, each with an investment amount and pre-money valuation. For each round it computes post-money valuation, the percentage of new shares issued, and the cumulative effect on founder ownership. You can see exactly how each round compounds dilution.
What It Does
Use the calculator with intent
The Dilution Calculator takes a series of funding rounds, each with an investment amount and pre-money valuation. For each round it computes post-money valuation, the percentage of new shares issued, and the cumulative effect on founder ownership. You can see exactly how each round compounds dilution.
Startup founders planning fundraising strategy, early employees evaluating equity grants, and angel investors modeling their stake through future rounds. Understanding dilution math is essential before any term sheet negotiation.
Interpreting Results
Focus on founder ownership percentage after the final round. Each round's new shares percentage shows the dilution from that specific round, while the cumulative founder ownership shows the compounding effect across all rounds.
Input Steps
Field by field
- 1
Round Name
Name each funding round (e.g., Pre-Seed, Seed, Series A). Add rounds in chronological order since dilution compounds sequentially.
- 2
Investment Amount
Enter the total investment amount for the round in dollars. This is the cash coming in, not the valuation.
- 3
Pre-Money Valuation
Enter the pre-money valuation for the round. Post-money equals pre-money plus investment. The ratio of investment to post-money determines dilution percentage.
- 4
Results
Review founder ownership after each round. Track how ownership compounds downward. Many successful founders retain 15-25% through Series B.
Common Scenarios
Use realistic starting points
Seed through Series A
Seed
$1M at $4M pre-money
Series A
$5M at $15M pre-money
After Seed, founders own 80%. After Series A, founders own about 60%. Each round compounds, so the total dilution is greater than the sum of individual rounds.
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FAQ
Questions people ask next
The short answers readers usually want after the first pass.
Sources & References
- Understanding Startup Dilution — Y Combinator
- Dilution — Investopedia