BYTETOOLS

Equity Dilution Calculator

Model a funding round on your cap table: post-money valuation, price per share, investor ownership and founder dilution, including the option pool shuffle.

Existing shareholders

$10,000,000
Post-money valuation
$7.0000
Price per share
20.00%
Investor ownership
10.00%
Option pool after round
285,714
New shares to investor
142,857
New pool shares created
1,142,857
Shares before round
1,428,571
Shares after round
HolderSharesBeforeAfterDilutionValue at round price
Founder A600,00060.00%42.00%−18.00%$4,200,000
Founder B350,00035.00%24.50%−10.50%$2,450,000
Seed investor50,0005.00%3.50%−1.50%$350,000
Option pool142,857—10.00%—$1,000,000
New investor285,714—20.00%—$2,000,000

post-money = pre-money + investment  ·  price per share = pre-money ÷ fully-diluted pre-money shares  ·  new shares = investment ÷ price  ·  investor % = investment ÷ post-money

Worked example with no pool: 1,000,000 existing shares, an $8,000,000 pre-money and $2,000,000 in gives a $10,000,000 post-money, $8.00 a share, 250,000 new shares and 20% to the investor. Add a 10% post-money option pool carved out of the pre-money and the price falls to $7.00: 142,857 pool shares and 285,714 investor shares against 1,428,571 total, leaving founders on 70% rather than 80%. The investor still owns exactly 20% — the pool comes entirely out of the existing holders.

This models a straightforward priced equity round on a fully-diluted basis. It does not handle convertible notes or SAFEs converting in the same round, liquidation preferences, anti-dilution ratchets or multiple share classes — all of which can change the real percentages materially. Use it to understand the shape of a term sheet, not as a substitute for the cap table your lawyer maintains. Nothing you type is uploaded; the whole calculation runs in your browser.

What is the Equity Dilution Calculator?

A term sheet's headline numbers hide most of what actually happens to your ownership. This calculator takes your existing shareholders, a pre-money valuation and an investment amount, then works out the post-money valuation, the price per share, how many new shares the investor receives and what percentage every existing holder is left with.

  • Post-money valuation, price per share and new shares issued
  • Option pool shuffle carved out of the pre-money, the way real term sheets do it
  • Per-holder before, after, dilution and value at the round price
  • Unlimited shareholder rows with editable names
  • Warning when a pool target cannot be carved out of the valuation
  • Completely client-side — cap table data is never uploaded

How to use the Equity Dilution Calculator

  1. 1

    List your existing shareholders and their share counts, adding rows as needed.

  2. 2

    Enter any existing unallocated option pool shares separately.

  3. 3

    Set the pre-money valuation and the investment amount for the round.

  4. 4

    Enter the new option pool target as a percentage of post-money, or 0 for no top-up.

  5. 5

    Read the price per share and investor ownership, then check each holder's dilution in the table.

About the Equity Dilution Calculator

A term sheet's headline numbers hide most of what actually happens to your ownership. This calculator takes your existing shareholders, a pre-money valuation and an investment amount, then works out the post-money valuation, the price per share, how many new shares the investor receives and what percentage every existing holder is left with.

It also models the option pool shuffle properly. When a new pool is carved out of the pre-money valuation, the founders pay for it, not the incoming investor — the share price drops and existing holders take extra dilution while the investor's percentage stays exactly where the term sheet says. Set the pool target to zero to see the difference.

Add as many shareholders as you need and watch the before-and-after table update as you type. Cap table figures are sensitive, and none of them leave your device: every calculation runs locally in your browser with nothing uploaded or stored.

Frequently asked questions

How do you calculate equity dilution in a funding round?

Post-money valuation is pre-money plus the investment. The price per share is the pre-money valuation divided by the fully-diluted share count before the round, and the investor receives the investment divided by that price. Everyone's existing shares stay the same, but the total grows, so each holder's percentage falls proportionally.

What is the option pool shuffle?

It is the practice of creating a new option pool out of the pre-money valuation rather than the post-money one. The effect is that existing shareholders fund the entire pool: the price per share falls, founders take extra dilution, and the investor still ends up with exactly the percentage the term sheet promised.

How much does a 10% option pool cost the founders?

More than 10%. On an 8 million pre-money with 2 million invested, adding a 10% post-money pool drops the price per share from 8 to 7 and leaves founders on 70% instead of 80% — a full ten points, all of it borne by the existing holders. Negotiating the pool is often worth more than negotiating the valuation.

Is dilution always bad for founders?

No. Owning a smaller slice of a much larger company is usually the whole point of raising money. What matters is whether the capital buys enough growth to more than offset the percentage you gave up — dilution is a price, not a loss.

Does this calculator handle SAFEs and convertible notes?

No. It models a straightforward priced equity round on a fully-diluted basis. Convertible instruments converting in the same round, liquidation preferences, anti-dilution ratchets and multiple share classes all change the real percentages, sometimes substantially. Use this to understand the shape of a deal, not as a replacement for your lawyer's cap table.

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