Equity Dilution Calculator
When a startup raises a new funding round, new shares are issued to investors, diluting the percentage ownership of all existing shareholders. Understanding dilution before signing a term sheet is essential for founders and early employees. This calculator computes the price per new share, the total post-money shares outstanding, your post-round ownership percentage, and the dollar value of your stake at the post-money valuation. Enter the pre-money valuation agreed with investors, the total investment amount, current shares outstanding, and your personal share count to see the full dilution impact.
Equity dilution formula
Post-money Valuation = Pre-money + Investment
Price Per New Share = Pre-money Valuation / Pre-money Shares
New Shares = Investment / Price Per New Share
Post-round Ownership = Your Shares / (Pre-money Shares + New Shares) * 100
Stake Value = Your Shares / Total Post-round Shares * Post-money Valuation
Typical dilution by funding round
- Pre-seed / Friends and family: 5 to 15% dilution.
- Seed round: 10 to 25% dilution.
- Series A: 20 to 30% dilution.
- Series B+: 15 to 25% dilution per round.
Equity dilution: frequently asked questions
What is equity dilution?
Equity dilution occurs when a company issues new shares (for a funding round, employee options, or convertible notes), reducing the ownership percentage of existing shareholders even though the total number of their shares stays the same.
How do I calculate dilution from a funding round?
New shares issued = Investment Amount / Price Per New Share. Price Per New Share = Pre-money Valuation / Pre-money Shares. Post-money shares = Pre-money shares + New shares. Your new ownership % = Your shares / Post-money shares * 100.
What is post-money valuation?
Post-money valuation = Pre-money valuation + Investment amount. It represents the company's value immediately after the investment. If the pre-money valuation is $4 million and investors put in $1 million, the post-money valuation is $5 million.
What is an option pool shuffle?
Investors often require a new or enlarged employee option pool to be created pre-closing, which dilutes existing shareholders (founders, early investors) before the new investment is priced. This is called the option pool shuffle.
What is a typical dilution per funding round?
Seed rounds typically dilute founders by 10 to 25%. Series A rounds commonly dilute by 20 to 30%. Series B and beyond often 15 to 25% per round. After 3 to 4 rounds, founders commonly hold 30 to 50% of their original ownership.
Sources
- U.S. Securities and Exchange Commission: Equity Financing.
- SEC: S-1 Filings (Cap Table Reference).
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.