portfolios.tools

Equity Dilution Simulator

Model VC round impact on founder ownership stakes.

Results

80%

20%

Cap Table
Founding10,000,000010,000,000100%$00%
Seed10,000,0002,500,00012,500,00080%$2,500,00020%

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$5
$1$50

How It Works

Enter founder share count and add funding rounds with investment amount and pre money valuation. The tool models a cap table across stages. Start with 10 million founder shares as a common baseline. Add each round in chronological order since later rounds calculate price per share from cumulative share count. Include angel and friends and family rounds before institutional Seed to see full dilution path from founding. Enter pre money valuation and new investment for priced round, or option pool increase percent for refresh scenarios common before Series B. Enter option pool top up percent from term sheet separately from new investor primary round dilution. Enter pre money valuation and new investment for priced round, or option pool increase percent for refresh scenarios common before Series B. Enter option pool top up percent from term sheet separately from new investor primary round dilution.

Review stage by stage ownership percentages, share counts, post money valuations, and cumulative dilution from founding to final round. Compare raising 2M at 8M pre versus 10M pre to quantify dilution cost. Founders planning a Series A should target ownership above 50% after the round to retain control through later stages. Model down round scenarios where pre money drops below prior post money to see full dilution impact. Board seats and protective provisions are separate from percentage ownership but affect control. Compare founder percent before and after both new money and pool expansion: pool refresh alone dilutes without any cash in. Employee option pool refresh before Series B often dilutes founders ten to fifteen percent without new cash. Compare founder percent after Series A primary plus pool refresh versus primary round alone. Compare founder percent before and after both new money and pool expansion: pool refresh alone dilutes without any cash in. Employee option pool refresh before Series B often dilutes founders ten to fifteen percent without new cash. Compare founder percent after Series A primary plus pool refresh versus primary round alone.

expansion: pool refresh alone dilutes without any cash in. Employee option pool refresh before Series B often dilutes founders ten to fifteen percent without new cash. Compare founder percent after Series A primary plus pool refresh versus primary round alone. Compare founder percent before and after both new money and pool expansion: pool refresh alone dilutes without any cash in. Employee option pool refresh before Series B often dilutes founders ten to fifteen percent without new cash. Compare founder percent after Series A primary plus pool refresh versus primary round alone.

Use Equity Dilution Simulator whenever inputs change: after market moves, new contributions, or revised personal assumptions. Bookmark the page for quick reruns without installing software.

Step by step

  1. Set founder shares and add funding rounds
  2. Review cap table stages and dilution
  3. Adjust investment and pre money to test dilution

Worked example

Example scenario for Equity Dilution Simulator: 50%. Enter those values above to reproduce the walkthrough described in How it works.

Adjust one input at a time to see sensitivity. Equity Dilution Simulator updates instantly so you can stress test optimistic and conservative assumptions before acting.

When to use this calculator

Reach for Equity Dilution Simulator when model vc round impact on founder ownership stakes.. It suits quick what if analysis before trades, allocation changes, or plan updates.

Pair with related tools when the decision spans taxes, liquidity, or multi year projections beyond what one formula captures.

Common mistakes

Copying outputs without checking input units or stale market prices is a frequent error with Equity Dilution Simulator. Confirm tickers, percentages, and dates before acting.

Running a single baseline scenario ignores tail risks. Stress test with conservative inputs and compare against related tools listed below when the decision is material.

The Formula

Price Per Share = Pre Money / Total Shares. New Shares = Investment / Price Per Share. Post Money = Pre Money + Investment. Founder % = Founder Shares / (Founder Shares + Investor Shares). Dilution = 100% - Current Founder %.

Starting from 100% founder ownership. Each round adds investor shares and reduces founder percentage. Does not model option pools, convertible notes, SAFE conversions, or anti dilution provisions. Use for scenario planning before fundraising. Full cap table software adds liquidation waterfalls and participating preferred math beyond this simulator. Assumes single round snapshot: pro rata participation rights let investors buy up and reduce dilution if exercised. Convertible note stacks require cap table software beyond single round calculator for accuracy. Weighted average anti dilution provisions in down rounds are not calculated in this simple ownership snapshot. SAFE stacks require cap table software beyond single round snapshot for accuracy. Assumes single round snapshot: pro rata participation rights let investors buy up and reduce dilution if exercised. Convertible note stacks require cap table software beyond single round calculator for accuracy. Weighted average anti dilution provisions in down rounds are not calculated in this simple ownership snapshot. SAFE stacks require cap table software beyond single round snapshot for accuracy.

Limitations and assumptions

Starting from 100% founder ownership. Each round adds investor shares and reduces founder percentage. Does not model option pools, convertible notes, SAFE conversions, or anti dilution provisions. Use for scenario planning before fundraising. Full cap table software adds liquidation waterfalls and participating preferred math beyond this simulator. Assumes single round snapshot: pro rata participation rights let investors buy up and reduce dilution if exercised. Convertible note stacks require cap table software beyond single round calculator for accuracy. Weighted average anti dilution provisions in down rounds are not calculated in this simple ownership snapshot. SAFE stacks require cap table software beyond single round snapshot for accuracy. Assumes single round snapshot: pro rata participation rights let investors buy up and reduce dilution if exercised. Convertible note stacks require cap table software beyond single round calculator for accuracy. Weighted average anti dilution provisions in down rounds are not calculated in this simple ownership snapshot. SAFE stacks require cap table software beyond single round snapshot for accuracy. Equity Dilution Simulator does not replace personalized advice. Fees, slippage, account specific rules, and behavioral constraints may change real world outcomes.

Key terms

How are new shares calculated per round
For each funding round, Price Per Share = Pre Money / Total Existing Shares.
What is post money valuation
Post Money = Pre Money + Investment.
Model assumption
Dilution from Start = 100% minus Current Founder %.

Compare alternatives

ESO Value Calculator helps model employee equity alongside founder dilution. Use those calculators when equity dilution simulator alone does not capture the full decision.

Internal links on portfolios.tools help you chain calculators: run Equity Dilution Simulator first, then validate edge cases with a specialized tool from the related section below.

FAQ

How are new shares calculated per round?

For each funding round, Price Per Share = Pre Money / Total Existing Shares. New Shares = Investment / Price Per Share. These new shares are added to the investor pool, reducing founder ownership percentage. Example: 10M shares at 4M pre money means 0.40 per share. A 1M investment buys 2.5M new shares, diluting founders from 100% to 80%. Participating preferred and liquidation preferences affect economic ownership beyond simple share count math. Fully diluted share count includes unissued option pool shares reserved in cap table even when grants are outstanding. Post money valuation equals pre money plus new investment: ownership percent uses fully diluted share count. Fully diluted share count includes unissued option pool shares reserved in cap table even when grants are outstanding. Post money valuation equals pre money plus new investment: ownership percent uses fully diluted share count.

What is post money valuation?

Post Money = Pre Money + Investment. Founder % = Founder Shares / Total Shares × 100. Each round dilutes both founders and existing investors proportionally. A Series A at 10M pre with 2M raised creates 12M post money valuation. Founders who owned 100% before now hold 10/12 or 83.3% before option pool grants. Pro rata rights let existing investors maintain ownership by participating in later rounds. SAFE conversion at cap versus discount produces different post money: this tool uses explicit new money inputs not SAFE stacks. New money divided by post money valuation gives investor ownership percent on fully diluted basis. SAFE conversion at cap versus discount produces different post money: this tool uses explicit new money inputs not SAFE stacks. New money divided by post money valuation gives investor ownership percent on fully diluted basis.

How is cumulative dilution tracked?

Dilution from Start = 100% minus Current Founder %. The cap table starts at 100% founder ownership and tracks how each funding round reduces it. Cumulative dilution across Seed, Series A, and Series B often leaves founders with 40 to 60% before IPO. Employee option pools typically add 10 to 20% dilution on top of investor rounds. Model option pool expansion in a separate scenario since pools are often created before each priced round. Pro rata rights let investors maintain ownership by buying their share of new round. Pro rata rights let investors maintain ownership by buying their share of new round.

How do I minimize dilution?

Raising at a higher pre money valuation means issuing fewer shares for the same investment amount, reducing dilution. Price per share is the key lever. Negotiating a 20M pre instead of 15M on a 3M round saves roughly 5 percentage points of founder ownership. Revenue traction and competitive term sheets strengthen your negotiating position. Bridge rounds at flat valuation avoid down round stigma but still dilute founders. Revenue multiples from public comps support higher pre money asks in investor meetings. Multiple sequential rounds compound dilution: rerun tool with post round ownership as starting point for next round model. Multiple sequential rounds compound dilution: rerun tool with post round ownership as starting point for next round model.

Can I model multiple funding rounds?

Add funding rounds with investment and pre money valuation. The cap table updates automatically. Model a Seed at 2M pre, Series A at 8M pre, and Series B at 25M pre to see typical progression. Your round data is saved locally in the browser. Export results to share with co founders before term sheet negotiations. Compare founder ownership after each round against industry benchmarks for your stage and sector. Liquidation preference stacks affect economic ownership not just percent on cap table: legal docs matter beyond this math. Founders should model two consecutive rounds before accepting aggressive pool refresh in Series A docs. Liquidation preference stacks affect economic ownership not just percent on cap table: legal docs matter beyond this math. Founders should model two consecutive rounds before accepting aggressive pool refresh in Series A docs.

Can I use Equity Dilution Simulator on a phone or tablet?

Yes. Equity Dilution Simulator runs entirely in your mobile browser with the same formulas as desktop. Optional localStorage may remember inputs on your device when enabled in browser settings.

Where is my data stored when I use Equity Dilution Simulator?

Nowhere on our servers. Calculations execute locally in your browser. Optional localStorage saves form fields on your device only and never transmits portfolio numbers over the network.

Should I rely on Equity Dilution Simulator for tax or legal decisions?

No. Equity Dilution Simulator provides educational math only. Tax law, account rules, and personal circumstances vary. Consult a qualified tax or legal professional before transactions with material consequences.

Related Tools

ESO Value Calculator helps model employee equity alongside founder dilution. Bootstrapped Breakeven shows when to raise versus grow organically. Cap Rate Evaluator supports founders evaluating real estate side income during early stage cash constraints. Rule of 40 benchmarks SaaS growth efficiency before Series B fundraising conversations. ESO Value Calculator helps employees translate cap table dilution into personal grant economics on portfolios.tools. ESO Value Calculator helps employees translate cap table dilution into personal grant economics on portfolios.tools.