Dilution Calculator

Model how your ownership changes across multiple funding rounds

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Funding Dilution Calculator

Model how your ownership changes across multiple funding rounds. Toggle rounds on/off to see different scenarios.

Starting Founder Ownership100%
Pre-Seed→ 78.9% ownership
$500K
$
$
10%
Post-Money:$4.5M
New Investor:11.1%
Dilution:-21.1%
You Keep:78.9%
Seed→ 61.1% ownership
$2M
$
$
10%
Post-Money:$10M
New Investor:20.0%
Dilution:-17.8%
You Keep:61.1%
Series A→ 43.3% ownership
$10M
$
$
10%
Post-Money:$40M
New Investor:25.0%
Dilution:-17.8%
You Keep:43.3%
Series B
Final Founder Ownership

43.3%

Total dilution: 56.7%

Total Raised

$12.5M

Final Valuation

$40M

Ownership Over Time

Start100.0% founder
Pre-Seed78.9% founder
Seed61.1% founder
Series A43.3% founder
Founders
Investors
Option Pool

Round Details

RoundRaisedPost-MoneyDilutionYou Own
Pre-Seed$500K$4.5M-21.1%78.9%
Seed$2M$10M-17.8%61.1%
Series A$10M$40M-17.8%43.3%

This model assumes option pool increases come from founder dilution (industry standard). Actual dilution may vary based on negotiated terms, pro-rata rights, and anti-dilution provisions.

Planning to raise?

Learn how to navigate fundraising and negotiate better terms.

Read the Fundraising Playbook

Understanding Startup Dilution

What is Dilution?

Dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders. When you raise funding, new investors receive shares in exchange for capital, which dilutes your stake.

Pre-Money vs Post-Money Valuation

These terms are crucial for understanding dilution:

  • Pre-Money Valuation: The value of your company before the investment. This is what you negotiate with investors.
  • Post-Money Valuation: Pre-money + investment amount. This is the total company value after the round.
  • Investor Ownership: Investment ÷ Post-Money Valuation

Example: $2M raised at $8M pre-money = $10M post-money. Investor gets $2M ÷ $10M = 20% ownership.

The Option Pool Shuffle

Investors typically require an option pool (shares reserved for future employees) as part of the financing. Here's the key insight:

  • The pool comes from pre-money: Standard practice is for the option pool to dilute existing shareholders (founders), not the new investors.
  • Typical sizes: 10-20% at early stages, refreshed each round to maintain adequate hiring capacity.
  • Negotiation tip: Negotiate the smallest pool you can justify based on your hiring plan for the next 12-18 months.

Typical Dilution by Stage

While every deal is different, here are typical ranges for B2B SaaS:

  • Pre-Seed: 10-20% dilution (often from angels or accelerators)
  • Seed: 15-25% dilution
  • Series A: 20-30% dilution
  • Series B: 15-25% dilution

After four rounds, founders typically retain 20-35% of the company. This is normal and expected - what matters is that 25% of a $100M company is worth more than 100% of a $10M company.

How to Minimize Dilution

  • Raise at higher valuations: Hit milestones that justify premium pricing before raising.
  • Raise less capital: Only raise what you need to hit your next major milestone.
  • Bootstrap longer: Revenue-funded growth preserves equity entirely.
  • Negotiate option pools: Right-size pools to actual hiring needs.
  • Use revenue-based financing: Non-dilutive capital for companies with revenue.

The Bigger Picture

Dilution isn't inherently bad - it's a trade-off. You're exchanging ownership for capital that can accelerate growth. The key questions are:

  • Will this capital help you build a larger company?
  • Are you getting a fair valuation for your stage and metrics?
  • Do you still have enough ownership to stay motivated?
  • Can you achieve similar outcomes with less capital?

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