Equity Dilution Calculator
Visualize how new funding rounds affect your ownership stake and calculate dilution impact.
What is Equity Dilution?
Equity dilution occurs when a company issues new shares, reducing existing shareholders’ ownership percentage. While your number of shares stays the same, they represent a smaller piece of the pie.
New Ownership = Your Shares / Total Shares After
Dilution is not always bad. If the new shares are sold at a higher price, the total company value increases, and your smaller percentage may be worth more in absolute terms.
Startup Funding Stages
- Pre-Seed/Seed: Typical dilution 15-25%. Founders retain most control. Valuation $1-5M.
- Series A: Typical dilution 20-30%. Often the first significant institutional investment.
- Series B: Typical dilution 15-25%. Company has proven product-market fit.
- Series C+: Typical dilution 10-20%. Company is scaling or preparing for exit.
- Total: After multiple rounds, founders often retain 10-30% ownership at IPO.
Protecting Against Dilution
- Anti-dilution clauses: Weighted-average or full-ratchet provisions protect investors in down rounds.
- Pro-rata rights: Right to participate in future rounds to maintain your ownership percentage.
- Option pool: Negotiate the option pool size before investment, not after, to minimize dilution.
- Vesting schedules: Ensure unvested shares are not counted in dilution calculations.
Frequently Asked Questions
How does the equity dilution formula work?
Your post-round ownership = Your Shares / (Total Shares Before Round + New Shares Issued). If you own 500,000 shares in a company with 2,000,000 total shares (25% ownership) and a Seed round issues 500,000 new shares, your ownership drops to 500,000 / 2,500,000 = 20%. Dilution = 25% − 20% = 5 percentage points.
What is the difference between the Share Count and Valuation modes?
In Share Count mode, you enter actual share numbers: your shares, total shares, and new shares issued per round. In Valuation mode, you enter the pre-money valuation, investment amount, and price per share — the calculator derives new shares as Investment / Price Per Share and adjusts your ownership accordingly.
Does dilution always reduce my financial stake?
Dilution reduces your ownership percentage but not necessarily your absolute financial value. If the new funding raises the company’s per-share value enough, your shares can be worth more in dollar terms even though you own a smaller percentage — this is called accretive dilution. The calculator shows both your ownership percentage and the implied dollar value of your stake using the current price per share.
What is a cap table?
A capitalization table (cap table) is a record of all shareholders, their share counts, ownership percentages, and share classes. The calculator generates a simplified cap table showing how ownership is distributed after each funding round, including founders, new investors, and any existing option pool.
What funding rounds does this calculator support?
The calculator pre-labels rounds as Seed, Series A, Series B, and Series C, and allows you to add additional named rounds. Each round is modeled sequentially, so the dilution compounds — being diluted in both a Seed and a Series A round means your final percentage is lower than either individual round’s dilution would suggest.