Startup equity dilution calculator

Dilution is the drop in your ownership share when new shares are issued: raising money at a pre-money valuation gives investors investment ÷ post-money of the company, and everyone else shrinks in proportion. Enter the cap table and the round to see each holder's stake afterwards.

Currency

Only changes how amounts are shown.

Cap table before the round

One holder per line: a name, a | and their percentage now. Include any existing option pool or earlier investors, on a fully diluted basis. The percentages must add up to 100.

Pre-money valuation

What the company is valued at before the new money goes in.

Investment in this round

New option pool

% of post-money

Optional: new shares reserved for employee options, as a share of the company after the round. 0 for none. An existing pool in your table is diluted like any other holder.

When is the new pool created?

In the pre-money, only existing holders pay for the pool. After the round, every holder, the new investor included, is diluted by it.

Shares outstanding before the round

Optional, fully diluted. Adds the price per share and the shares issued.

Add a second round

New investor's stake after the round

20%

₹2,00,00,000 ÷ ₹10,00,00,000 post-money

Post-money valuation: ₹10,00,00,000Pre-money + investment: ₹8,00,00,000 + ₹2,00,00,000.
Investor's stake at closing: 20%Investment ÷ post-money: ₹2,00,00,000 ÷ ₹10,00,00,000.
New option pool: 10%Of the company after the round, created in the pre-money: worth ₹1,00,00,000 at the round's price, all of it from existing holders' stakes.
Effective pre-money valuation: ₹7,00,00,000Pre-money − the new pool's value: ₹8,00,00,000 − ₹1,00,00,000. What existing holders' shares are really priced at.
Existing holders together: 70% (was 100%)100% − investor 20% − new pool 10%.
Founder A: 42% (was 60%)Down 18 percentage points: 30% of their stake diluted.
Founder B: 28% (was 40%)Down 12 percentage points: 30% of their stake diluted.

Cap table before and after the round (fully diluted)
Holder	Before	After round 1
Founder A	60%	42%
Founder B	40%	28%
New option pool	—	10%
Round 1 investor	—	20%
Total	100%	100%

With the pool in the pre-money, the ₹8,00,00,000 valuation includes ₹1,00,00,000 of new options, so existing holders are effectively valued at ₹7,00,00,000.
Convertible notes, SAFEs and other instruments that convert into shares at a round are out of scope. If any convert in this round, they add shares, and the stakes shown here are higher than the real ones.
This is arithmetic on the numbers you enter, not legal, tax or investment advice. The signed agreements decide the real cap table.

How is equity dilution calculated in a funding round?

A priced round starts from two numbers: the pre-money valuation, what the company is valued at before the new money, and the investment. Their sum is the post-money valuation, and the investor's stake is the investment divided by it. ₹2 crore invested at a ₹8 crore pre-money makes a ₹10 crore post-money, so the investor owns ₹2 crore ÷ ₹10 crore = 20%.

The company issues new shares to the investor, so every existing holder keeps the same number of shares but a smaller percentage. Without a new option pool, each existing stake is multiplied by pre-money ÷ post-money: 60% becomes 60% × 0.8 = 48%. At the round's price that stake is still worth ₹4.8 crore, the same as 60% of ₹8 crore.

A new option pool changes who pays for it. If the pool is created in the pre-money, the "option pool shuffle" Venture Hacks described in 2007, the pre-money valuation includes the new options, so only existing holders are diluted by them: a 10% pool of the ₹10 crore post-money takes ₹1 crore out of their ₹8 crore, an effective pre-money of ₹7 crore, and 60% becomes 42%. If the pool is added after the round, it dilutes everyone, the new investor included: the investor ends at 20% × 0.9 = 18% and the 60% holder at 48% × 0.9 = 43.2%.

If you enter the shares outstanding before the round, the price per share is the pre-money valuation divided by them; with the pool in the pre-money, it is the effective pre-money that is divided. A second round repeats the arithmetic: every stake after round 1, the pool and the round 1 investor included, is multiplied by round 2's pre-money ÷ post-money.

post-money = pre-money + investment
investor % = investment ÷ post-money
no new pool: holder % after = holder % before × pre-money ÷ post-money
pool in the pre-money: holder % after = holder % before × (1 − investor % − pool %)
  effective pre-money = pre-money − pool % × post-money
  price per share = effective pre-money ÷ shares before
pool after the round: investor % = investment ÷ post-money × (1 − pool %)
  holder % after = holder % before × pre-money ÷ post-money × (1 − pool %)
  price per share = pre-money ÷ shares before

How to calculate dilution from a funding round

1
Enter the cap tableType one holder per line with their percentage now, such as "Founder A | 60", including any existing option pool or earlier investors. The lines must add up to 100%.
2
Enter the roundType the pre-money valuation and the investment. Add a new option pool as a percentage of post-money, and choose whether it is created in the pre-money or after the round.
3
Add shares and a second roundOptionally, enter the shares outstanding before the round to see the price per share and the shares issued, and tick the second round to enter its pre-money and investment.
4
Read the cap tableThe result shows the post-money valuation, the investor's stake and each holder's percentage before and after every round, with the shares if you entered them.

Frequently asked questions

What is the difference between pre-money and post-money valuation?

Pre-money is the value of the company before the new investment; post-money is pre-money plus the investment. The investor's stake is the investment divided by post-money, so ₹2 crore at a ₹8 crore pre-money buys 20%, while ₹2 crore at a ₹8 crore post-money would buy 25%.

Why does an option pool created in the pre-money dilute only the founders?

Because the investor's price is set by a pre-money valuation that already includes the new options. With a 10% pool of a ₹10 crore post-money, ₹1 crore of the ₹8 crore pre-money is options, so existing holders are effectively valued at ₹7 crore and keep 70% between them. Venture Hacks called this the option pool shuffle in 2007.

Does dilution mean my shares are worth less?

Not at the round's price, if there is no new pool: 60% of a ₹8 crore pre-money is ₹4.8 crore, and 48% of the ₹10 crore post-money is still ₹4.8 crore. You own a smaller share of a company worth more. A pool created in the pre-money is the exception: its value comes out of existing holders' stakes, so 42% of ₹10 crore is ₹4.2 crore.

How does a second funding round change a founder's stake?

It multiplies every existing stake by that round's pre-money ÷ post-money. A founder with 42% after a first round, who then raises ₹7.5 crore at a ₹30 crore pre-money, keeps 42% × 30 ÷ 37.5 = 33.6%; the dilution of each round compounds on the last.

How do SAFEs and convertible notes affect dilution?

They convert into shares at a later priced round, so they add shares on top of the new investor's and dilute existing holders further. How many shares depends on each instrument's valuation cap, discount and terms, which this calculator doesn't model. If you already know the stake each one converts into, add it to the cap table as a holder before the round.

Sources

Venture Hacks: The Option Pool Shuffle (Nivi, 10 April 2007) (checked 20 Oct 2026)

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