Dilution Calculator

Four numbers drive the whole calculation: existing shares outstanding, pre-money valuation, the new capital amount, and an optional option pool percentage. Post-money valuation is pre-money plus the new investment, nothing more complicated than that.

Option pools follow the same mechanic in every priced round. When one gets created or topped up alongside the new investment, standard practice sizes it as a percentage of the post-round cap table and carves it out of the pre-money side. The formula: option pool shares equal existing shares times the pool percentage, divided by one minus the pool percentage. That's the same "pre-money option pool shuffle" real term sheets already build in.

Price per share follows from there: pre-money valuation divided by existing shares plus the new pool shares, the same fully diluted math a valuation firm runs to price a stake. New investors' shares equal the capital they're putting in divided by that price, and every ownership percentage after the round is a holder's shares divided by the new, larger total.

Sizing the pool this way matters because of who pays for it. A pool created before the round comes entirely out of existing shareholders' pockets, mostly the founders. A pool created after the round spreads the cost across every shareholder, new investors included. Most priced rounds use the pre-money version, something both founders and investors are expected to know before term sheets get signed.

Ten to fifteen percent of the post-round cap table is the typical option pool range, with 10% the single most common choice, according to HSBC Innovation Banking's 2026 Term Sheet Guide as reported by Carta. That figure is the calculator's default, and a startup hiring fast for its next milestone can justify a bigger reserve, while one with a mostly built team can run leaner.

Pre-money valuation itself often traces back to a market potential calculator estimate of the total addressable market, discounted for the company's stage and traction.

Start with 8,000,000 existing shares, a $20,000,000 pre-money valuation, a $5,000,000 investment, and a 10% option pool. Option pool shares: 8,000,000 × 0.10 ÷ 0.90 = 888,889. Existing shares plus pool shares: 8,888,889.

Price per share: $20,000,000 ÷ 8,888,889 = $2.25. New investor shares: $5,000,000 ÷ $2.25 = 2,222,222. Fully diluted shares after the round: 8,888,889 + 2,222,222 = 11,111,111.

Final ownership: existing shareholders hold 8,000,000 of 11,111,111 shares, 72.0%. The option pool holds 888,889 shares, 8.0%. The new investor holds 2,222,222 shares, 20.0%. That's a 28-point drop from the 100% existing shareholders held before the round, split between the pool and the new money.

Run the same $20,000,000 pre-money and $5,000,000 investment with the pool box unchecked and existing ownership lands at 80%, eight points above the 72% the pool version produces, since those 8 points never get carved out. That eight-point gap is the option pool's cost to existing shareholders on this round alone.

This tool prices one round cleanly: a fixed pre-money valuation, a fixed investment amount, an optional pool. Real financings carry more moving parts than four numbers and a checkbox, and a startup that raises capital across several rounds compounds all of it, one round at a time. Treat the output as a starting point, and open real capitalization table software for the number that goes on a signed document.

A founder modeling growth across those same rounds can run the resulting revenue or valuation path through a CAGR calculator to see the annual pace that trajectory implies.

Convertible notes and SAFEs that haven't converted yet don't show up here. If a company has outstanding notes with a valuation cap or a discount, model their conversion into shares first and run the resulting share count through this calculator afterward.

Liquidation preferences, anti-dilution protection, and pro rata rights change what a round is worth to different holders without changing the ownership percentages this calculator reports. A 1x participating preferred stake and a 1x non-participating stake can show the identical ownership percentage here and carry a different payout value at an exit, even when the ownership stake on paper reads the same.

How much value each shareholder realizes in the end depends on the company's exit, on top of the ownership percentage a cap table shows today.

How much dilution is normal varies by stage. A rough benchmark compiled from about 1,200 recent financings: roughly 20% in a seed round, 20% in a Series A, 15% in a Series B, 10-15% in a Series C, and around 10% in a Series D (Carta data, reported by SaaStr, August 2023). Funding databases like Crunchbase track thousands of primary rounds, useful for checking a specific deal against real comparables beyond this benchmark.

A round landing well outside that range deserves a second look before anyone signs. Founder dilution and founder ownership follow the same curve either way: steep in the earliest rounds, flatter by the time a Series C or D closes.

Divide the new shares issued, to new investors or an option pool, by the fully diluted share count after the round. A startup with 8,000,000 shares that issues 3,111,111 new shares (investors plus pool) ends up with 11,111,111 fully diluted, and the 3,111,111 represents 28.0% dilution to everyone who held shares before the round.

Most cap table calculator tools calculate the same dilution percentage this way, for new shares issued as common shares or as option pool shares.

Equity dilution is the drop in a shareholder's ownership percentage that happens when a startup issues new shares to new investors, an option pool, or anyone else. The shares someone already owns stay fixed in number. The fully diluted share count outstanding grows around them, so the same holding becomes a smaller slice of a bigger pie, a drop in the bucket next to how much capital and stock the company just issued.

Rough industry benchmarks, compiled from about 1,200 recent financings: roughly 20% in a seed round, 20% in a Series A, 15% in a Series B, 10-15% in a Series C, and around 10% in a Series D (Carta data, reported by SaaStr, August 2023). Where an individual round lands against that range is worth checking, since a large gap usually traces back to an unusually big or small option pool.

Before, in most priced equity rounds. Sizing the pool as part of the pre-money valuation puts its cost on the existing shareholders' side of the table. A founder negotiating a term sheet gains real leverage by pushing on the requested pool size before it lands there, since a smaller pool at signing means less of the round's capital comes out of the founders' own stake, and investors expect that math settled before signing.

Pre-money valuation prices the company before new money comes in. Post-money valuation adds the investment on top, the company's value the moment the round closes.

A cap table, short for capitalization table, is the spreadsheet or cap table calculator that lists every shareholder, founders included, next to their share count and founder ownership percentage. Equity in a startup is the ownership those shares represent, and every figure this equity dilution calculator reports traces back to one of these three ideas.

A full cap table calculator tracks every one of a startup's funding rounds, every option grant, and every conversion, building the complete fully diluted equity and ownership picture as of today. An equity dilution calculator like this one prices a single round in isolation: pre-money valuation, investment capital, and option pools in, ownership percentages out.

Use this for a quick check before or during a negotiation with investors, and a real cap table tool for the document a startup files.

Drop this on any page and it renders the calculator above, live, no login or install required. It's free to use. The only ask is leaving the credit link in place.