🥧 Equity Dilution Calculator

The Equity Dilution Calculator shows founders, early employees, and angel investors exactly what happens to their ownership stake when a company raises a new priced funding round. Raising money is good for the company, but it always means issuing new shares — and every existing shareholder's percentage ownership shrinks a little as a result. This tool makes that math concrete instead of abstract.

How It Works

The calculator first finds the Price per Share by dividing the Pre-Money Valuation by the Total Shares Outstanding before the round. It then divides the New Investment Amount by that price to find how many New Shares are Issued. Adding those new shares to the pre-round total gives the Post-Round Total Shares, while adding the New Investment to the Pre-Money Valuation gives the Post-Money Valuation. Your Ownership % Before and After are simply your unchanged share count divided by the total shares before and after the round — the difference between those two percentages is your Dilution. Your Stake Value After multiplies your new, smaller ownership percentage by the larger post-money valuation.

Why It Matters

Founders and early employees often see a shrinking ownership percentage and assume it's automatically bad news — but dilution and value destruction are not the same thing. Because the company's valuation typically rises alongside the new investment, a smaller slice of a bigger pie can be worth the same or more than a bigger slice of a smaller pie. Understanding the actual dollar value of your stake before and after a round, not just the percentage, is what matters when evaluating a term sheet.

Tips for Accurate Results

• Use the fully diluted share count (including existing options and warrants) for Total Shares Outstanding, not just issued common shares, for a more realistic price per share.
• Remember this calculator models a straightforward new-money round; if the round also creates or tops up an option pool, actual dilution will typically be somewhat higher than shown here.
• Compare Ownership % and Stake Value together — a round that dilutes you more in percentage terms can still leave you better off if it comes with a strong valuation increase.
• Re-run the calculation with different investment amounts and pre-money valuations to understand how sensitive your stake is to deal terms before you negotiate.