Dilution Calculator
Model exactly how much you'll be diluted in your next funding round. Free, no signup required.
Round inputs
The value of your company before the new investment goes in.
How much new capital you're raising in this round.
Your fully-diluted ownership today, as a percentage.
A new pool is typically created before the round, diluting existing shareholders only.
Ownership breakdown
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How startup dilution actually works
Every time your startup issues new shares - to investors, to employees, to advisors - every existing shareholder is diluted. The math is the same regardless of who's getting the new equity: the denominator gets bigger, your numerator stays the same.
The two-line formula
For any priced round, two numbers determine almost everything:
- Post-money valuation = pre-money + amount raised.
- Investor ownership = amount raised ÷ post-money.
If your round is $5M on a $20M pre-money, the post-money is $25M and the new investor owns 20%. Every existing shareholder - founders, employees, prior investors - is diluted by 20% proportionally.
The hidden dilution: pre-money option pool
Most term sheets require the company to top up the option pool beforethe round closes - typically to ~10% of the post-money cap. This is the “option pool shuffle.” Since the new pool is created from the pre-money valuation, only existing shareholders dilute for it - the investor's 20% stays clean.
Real-world impact: a $5M Series A at $20M pre with a 10% post-money pool. New investor still gets 20%. New pool takes 10%. Existing shareholders go from 100% → 70% of the company. If you owned 30%, you now own 21%.
What to negotiate
- Pool size: challenge whether 10% is actually needed. If you only need 5% for the next 18 months of hires, ask for 5%.
- Pool placement: argue for some of the pool to come post-money - even a 50/50 split saves founders meaningful equity.
- Pre-money valuation: a higher pre-money directly reduces investor ownership and protects your dilution.
Frequently asked questions
- What is startup dilution?
- Dilution is the reduction in your ownership percentage when a company issues new shares - usually to investors in a funding round or to employees through an option pool. The total pie gets bigger; your slice stays the same size, but it represents a smaller share of the whole.
- How is dilution calculated?
- New investor ownership = amount raised ÷ post-money valuation. Post-money valuation = pre-money + amount raised. If you owned 20% before a $5M raise at $20M pre-money ($25M post-money), the investor gets 20% (5/25), and every existing shareholder is diluted by 20% - so your 20% becomes 16%.
- Why does the option pool create more dilution?
- Most term sheets include a pre-money option pool - meaning the new pool is carved out of existing shareholders' equity before the new investor's money goes in. This is the 'option pool shuffle.' If a Series A asks for a 10% post-money pool and you're raising $5M at $20M pre, your dilution increases by another ~10 percentage points on top of the investor's stake.
- Is dilution always bad?
- No. Smart dilution increases the value of what's left. If raising $5M at a $20M pre-money causes you to go from 30% to 24% but adds $5M of growth capital that takes your company from $25M to $100M, your stake is now worth $24M instead of $7.5M. Bad dilution is when you give up too much for too little.
- How can I model dilution across every shareholder?
- This calculator shows your personal dilution. To see every founder, employee, and investor's new ownership after a round - plus model multiple scenarios, exit waterfalls, and convertible notes converting - start a Slyced trial. The full cap table model lives in your account.
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