Equity Dilution Calculator

What is Equity Dilution? Equity dilution is what happens when a company issues new shares (to investors, to create or expand an option pool, or via other equity grants) and your...

Equity Dilution Calculator

Estimate how issuing new shares changes your ownership. Enter existing fully diluted shares, your current stake, and new shares issued to investors to see post-round ownership and dilution in percentage points.

shares

Total fully diluted shares outstanding before this round (issued shares plus in-the-money options and other convertible instruments).

%

Your stake as a percentage of existing fully diluted shares before the new round. Use your pre-money ownership (e.g., 15 for 15%).

shares

Number of new shares issued to investors in this round (excluding pre-existing option pool increases and without assuming you buy new shares).

Scenarios
Load common funding scenarios to see how new shares change your stake.
Seed round, modest dilutionSeries A, growth capitalDilutive / down roundSmall internal top-up

Results

  • Pre-round ownership— %
  • Post-round ownership— %
  • Dilution (percentage points)— pp
  • New investors' ownership— %
  • Dilution profile—

Enter your inputs above to calculate the results.

What is Equity Dilution?

Equity dilution is what happens when a company issues new shares (to investors, to create or expand an option pool, or via other equity grants) and your ownership percentage goes down—even if you still own the same number of shares.

It matters because dilution reshapes control and voting power, and it reduces your slice of the future exit value (what you’d get in an acquisition or IPO). In practice, dilution ties directly into cap table outcomes, founder incentives, and whether growth financing is creating real shareholder value after you consider things like pre-money valuation, post-money valuation, and your implied equity value at exit.

Formula

Your Shares = Pretext-round Ownershiptimes Existing Fully Diluted Shares
Posttext-round Ownership = Your Shares / (Existing Fully Diluted Shares + New Shares Issued)
Dilution (pp) = Pretext-round Ownership-Posttext-round Ownership

Notes: “Fully diluted shares” typically includes common shares plus in-the-money options or warrants and the option pool, depending on how your cap table is defined. The core logic is simple: your share count stays constant, total shares increase.

Example

Existing fully diluted shares: 10,000,000

Your current ownership: 15%

New shares issued in this round: 2,500,000

Your Shares = 0.15 × 10,000,000 = 1,500,000
Total post-round shares = 10,000,000 + 2,500,000 = 12,500,000
Post-round ownership = 1,500,000 ÷ 12,500,000 = 12%
Dilution (pp) = 15% − 12% = 3 pp
New investors ownership = 2,500,000 ÷ 12,500,000 = 20%

How to interpret it: you didn’t lose shares—you lost percentage ownership because the denominator grew. To judge whether the dilution was worth it, founders usually compare the new post-money valuation against the capital raised, then pressure-test potential outcomes using exit value, equity value, and—where relevant—the impact on enterprise value after accounting for net debt.

Frequently Asked Questions

How do I calculate dilution from a new funding round (new shares issued)?

Enter the current fully diluted share count, the number of new shares issued in the round, and your current ownership %. The calculator outputs your post-round ownership and the dilution in percentage points.

Does this assume I don’t invest (no pro-rata participation)?

Yes. It assumes your share count stays the same while total shares increase. If you invest pro-rata, your post-round ownership would be higher than the non-participation result.

What should I use for “existing fully diluted shares”?

Use the fully diluted share count before the round—common shares plus all in-the-money options/warrants and other dilutive securities you’re modeling (per the company’s cap table definition).

What’s the difference between “dilution (percentage points)” and “% dilution”?

Percentage points is the simple drop in ownership (e.g., 15% → 12% = 3 pp). “% dilution” would be the relative decrease (3/15 = 20%), which is a different number.

Sources & Methodology