Free Startup Dilution Calculator
Model equity dilution across multiple funding rounds. See how your ownership changes with each raise and option pool expansion.
Initial Cap Table
Total Initial Shares
10.00M
Funding Rounds
Enter your cap table and funding rounds to model dilution
How to Use the Startup Dilution Calculator
Enter Current Ownership
Input your current ownership percentage and the total number of shares outstanding. This establishes your baseline before new dilution events.
Add Funding Rounds
Enter details for each funding round including raise amount, pre-money valuation, and any option pool increases. Add multiple rounds to model cumulative dilution.
Include SAFE/Note Conversions
Add any outstanding SAFEs or convertible notes that will convert at the next priced round. These convert before new investors, adding to founder dilution.
Analyze Ownership Over Time
Review how your ownership percentage changes after each round. See your final ownership, total dilution, and the dollar value of your stake at various exit valuations.
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Understanding Startup Dilution
Dilution is an inevitable part of the startup journey. Every time you raise funding, issue employee options, or convert SAFEs, existing shareholders get diluted. The key is understanding how much dilution to accept and ensuring each round increases the overall value of your stake.
Sources of Dilution
- Funding Rounds: New investors receive shares, diluting existing holders
- Option Pool: Reserved shares for employees reduce founder percentage
- SAFE/Note Conversion: Early investments convert at favorable terms
- Advisor/Employee Grants: Stock grants from the option pool
Frequently Asked Questions
What is equity dilution in startups?
Equity dilution occurs when new shares are issued, reducing existing shareholders percentage ownership. If you own 50% of 1M shares (500K shares) and 1M new shares are issued, you still own 500K shares but now only 25% of 2M total shares.
How does the option pool affect founder dilution?
Option pools typically come from the pre-money valuation, diluting existing shareholders (mainly founders) before new investors. A 15% option pool increase means founders give up 15% of the pre-money ownership before the investment.
What is typical dilution per funding round?
Typically, founders dilute 15-25% per round. Seed rounds often take 15-20%, Series A takes 20-25%. Including option pool expansions, founders often retain 50-60% after seed, 35-45% after Series A, and 25-35% after Series B.
How can founders minimize dilution?
Raise at higher valuations, negotiate smaller option pool requirements, bootstrap longer, use revenue-based financing, negotiate pro-rata rights for participation in later rounds, or use SAFEs with higher caps.
Does dilution mean I lose money?
Not necessarily. While your percentage decreases, the total value may increase. Owning 10% of a $100M company ($10M) is more valuable than 50% of a $1M company ($500K). Focus on growing the pie, not just your slice.
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