1. Scope
Models ownership dilution across funding rounds given pre-money, investment amount, and option-pool top-ups. Does not model anti-dilution provisions, liquidation preferences, or convertible-note conversion mechanics.
2. Inputs and outputs
Inputs
- currentOwnership percent
- preMoneyValuation number (currency)
- investmentAmount number (currency)
- optionPoolPercent percent default: 0
New options carved from pre-money.
Outputs
- postMoneyValuation
preMoney + investment.
- investorOwnership
investment / postMoney.
- postRoundOwnership
Ownership after pool-shuffle and new-investor dilution.
Engine source: src/lib/dilution-calculator/engine.ts
3. Formula / scoring logic
post_money = pre_money + investment
investor_pct = investment / post_money
pool_pct = option_pool / post_money (carved pre-money)
owner_post = owner_pre * (1 - investor_pct - pool_pct)4. Assumptions
- Option pool is carved from pre-money (dilutes existing shareholders more), not from post-money.
- All shares are common — preferred stacks are out of scope.
- No conversion of notes, SAFEs, or convertible debt.
5. Data sources
- NVCA Model Legal Documents as of 2024
6. Known limitations
- Does not model SAFE or convertible-note conversion — conversion requires cap-table software (Carta, Pulley).
- Liquidation preferences can make apparent ownership misleading in exit scenarios.
7. Reproducibility
Input
currentOwnership = 60%, preMoney = $4M, investment = $1M, optionPool = 10%.
Expected output
post_money = $5M, investor_pct = 20%, pool_pct ≈ 10%, owner_post ≈ 42%.
8. Change log
- 2026-04-24 methodology page first published.
Worked example
Run live against the same engine this site ships
(/engines/dilution-calculator.js).
The inputs and outputs below are recomputed on every build and
independently re-verified in CI — they are never hand-authored.
Input
- tool
- dilution_calculator
- rounds[0].name
- Seed
- rounds[0].investment_amount
- 500000
- rounds[0].pre_money_valuation
- 2000000
Output
- rounds[0].name
- Seed
- rounds[0].investmentAmount
- 500000
- rounds[0].preMoneyValuation
- 2000000
- rounds[0].postMoneyValuation
- 2500000
- rounds[0].newSharesPercent
- 20
- rounds[0].founderOwnershipPercent
- 80
Frequently asked questions
- What does the Dilution Calculator calculate?
- Models ownership dilution across funding rounds given pre-money, investment amount, and option-pool top-ups. Does not model anti-dilution provisions, liquidation preferences, or convertible-note conversion mechanics.
- What inputs does the Dilution Calculator need?
- It takes 4 inputs: currentOwnership, preMoneyValuation, investmentAmount, optionPoolPercent (default 0). Outputs returned: postMoneyValuation, investorOwnership, postRoundOwnership.
- What formula does the Dilution Calculator use?
- The exact computation is: post_money = pre_money + investment; investor_pct = investment / post_money; pool_pct = option_pool / post_money (carved pre-money); owner_post = owner_pre * (1 - investor_pct - pool_pct)
- Can I verify the Dilution Calculator with a worked example?
- Yes. With currentOwnership = 60%, preMoney = $4M, investment = $1M, optionPool = 10%. the tool returns post_money = $5M, investor_pct = 20%, pool_pct ≈ 10%, owner_post ≈ 42%.
- Where does the Dilution Calculator get its benchmark data?
- Reference data is sourced from: NVCA Model Legal Documents (as of 2024).
- What can the Dilution Calculator not tell me?
- Known limitations: Does not model SAFE or convertible-note conversion — conversion requires cap-table software (Carta, Pulley). Liquidation preferences can make apparent ownership misleading in exit scenarios.