Founder Dilution Calculator

What is Founder Dilution? Founder dilution is the drop in founders’ ownership percentage when new equity is issued in a financing round — and it can also happen when the employe...

Founder Dilution Calculator

Estimate how a single funding round changes the founders' ownership. Enter pre-money valuation, new capital, and the founders' pre-round stake to see post-round ownership and dilution in percentage points.

$

Equity value of the company immediately before this round (pre-money), on a fully diluted basis.

$

Cash invested in this funding round (primary capital). Secondary share sales are ignored. Investor % = Investment / (Pre-money + Investment).

%

Combined fully diluted ownership held by all founders before the round. Enter 55.5 for 55.5%. Founder post % = Founder pre % × Pre-money / (Pre-money + Investment).

Scenarios
Load typical venture rounds to see how founders' ownership changes with different pre-money valuations and round sizes.
Extension / light dilutionStandard Series ADilutive / down roundSmall internal top-up

Results

  • Post-money valuation$
  • Founders' pre-round ownership— %
  • Founders' post-round ownership— %
  • Other pre-round holders (post-round)— %
  • Founder dilution (percentage points)— pp
  • New investors' ownership— %
  • Dilution profile—

Enter your inputs above to calculate the results.

What is Founder Dilution?

Founder dilution is the drop in founders’ ownership percentage when new equity is issued in a financing round — and it can also happen when the employee option pool is created or expanded.

It matters because ownership drives real outcomes: governance leverage (control and voting power), incentive alignment (retention and hiring), and the founders’ share of eventual exit value. If you want to see the “before vs after” impact of a round, start with a cap table view and sanity-check the core math with an ownership percentage calculation on a fully diluted basis.

In practice, dilution is tightly connected to option pool sizing (use the ESOP calculator to model pool % and grants), round pricing (run pre-money valuation to understand what you’re actually selling), and convertibles like SAFE or notes that convert later and can shift dilution at the next priced round. To translate dilution into “what do I actually take home?”, pair this with an exit proceeds (or exit waterfall) calculator to model payouts under different exit values and preferences.

Formula

PostMoney = PreMoney + NewInvestment
NewInvestors Ownership% = NewInvestment / PostMoney
PreRoundHolders PostRound Multiplier = PreMoney / PostMoney
Founders PostRound Ownership% = Founders PreRound Ownership% × PreMoney / PostMoney
Other PreRound Holders PostRound% = (100% − Founders PreRound Ownership%) × PreMoney / PostMoney
Founder Dilution (pp) = Founders PreRound Ownership% − Founders PostRound Ownership%

Example

Inputs (priced round, no option pool increase, no SAFEs/notes converting, no secondary):

  • Pre-money valuation: $20,000,000
  • New investment amount: $5,000,000
  • Founders’ combined pre-round ownership: 55%

Steps:

1) Post-money valuation: PostMoney = 20,000,000 + 5,000,000 = 25,000,000
2) New investors ownership: 5,000,000 / 25,000,000 = 20%
3) Pre-round holders keep: 20,000,000 / 25,000,000 = 80%
4) Founders post-round ownership: 55% × 80% = 44%
5) Other pre-round holders (post-round): (100% − 55%) × 80% = 36%
6) Founder dilution (percentage points): 55% − 44% = 11 pp

Frequently Asked Questions

How do I calculate how much dilution founders take in a priced round?

In a simple priced equity round (no option pool changes, SAFEs, convertibles, or secondary), dilution is driven by the new investor %: Investor % = Investment ÷ (Pre-money + Investment). Founders’ post-round % = Founders’ pre-round % × (Pre-money ÷ Post-money). Founder dilution (pp) = Founders’ pre-round % − Founders’ post-round %.

Why did “Founders’ post-round ownership” drop even though the valuation went up?

Valuation can rise (post-money = pre-money + investment) while ownership still drops because new shares are issued to the investor. Your slice is a smaller percentage of a bigger pie.

What does “Other pre-round holders (post-round)” mean?

It’s everyone who already owned shares pre-round besides the founders (e.g., early employees, advisors, angels, existing investors). The calculator shows what their combined ownership becomes after the new investor comes in.

Does this include option pool top-ups, SAFEs, convertible notes, or secondary sales?

No—this tool is for a clean, single priced equity round. If you have an option pool increase, SAFEs/notes converting, or secondary, you need a full cap table model because who absorbs dilution changes.

Sources & Methodology