toolbox
Home / Startups & Digital Business / Series A Dilution Calculator

Series A Dilution Calculator

This Series A Dilution Calculator estimates how a financing round reduces an existing holder’s ownership percentage. It models dilution from new investment and an optional post-financing option-pool increase.

Enter the holder’s current ownership, the pre-money valuation, and the new capital. The result shows post-round ownership, percentage-point loss, relative dilution, and the new investor stake. It is a simplified planning model rather than a legal cap table.

Inputs

%
USD
USD
%
Result
—
Existing holder post-round ownership
Post-round ownership—
Percentage-point loss—
Relative dilution—
New investor ownership—

1. Enter current ownership
Use the holder’s fully diluted percentage before the financing.

2. Enter valuation and investment
Use the negotiated pre-money value and new Series A capital.

3. Set the new option pool
Enter an additional post-financing pool percentage, or zero if none is added.

4. Review ownership loss
Compare the new percentage with the percentage-point and relative dilution results.

5. Validate assumptions
Check the term sheet for whether the pool is created pre-money or post-money.

New investor ownership = Investment / (Pre-money valuation + Investment) Existing ownership factor = (1 - Investor ownership) × (1 - New option pool) Post-round holder ownership = Current ownership × Existing ownership factor Relative dilution = (Current ownership - Post-round ownership) / Current ownership

This implementation treats the entered pool as an additional post-financing allocation. A pre-money option-pool increase shifts more dilution to existing holders and requires a different cap-table calculation.

What the result means

Post-round ownership is the holder’s remaining percentage after modeled financing and pool dilution.

Dilution changes ownership percentage, not necessarily the economic value of the stake.

Given

  • 60% current ownership
  • $24,000,000 pre-money
  • $8,000,000 investment
  • 5% post-financing option pool

Calculation

Investor ownership = 8 / 32 = 25%. Existing factor = 75% × 95% = 71.25%. Post-round ownership = 60% × 71.25% = 42.75%.

Result

Post-round ownership = 42.75%.

The holder loses 17.25 percentage points, equal to 28.75% relative dilution.

What is the difference between percentage-point loss and relative dilution?

A fall from 60% to 45% is a 15-point loss but a 25% relative reduction from the original stake.

Does dilution mean the shares are worth less?

Not automatically. The percentage falls, but the company value may increase because new capital is added.

How does an option pool affect founders?

Creating or enlarging a pool issues additional equity and reduces other holders’ percentages.

What if the option pool is created pre-money?

Existing holders generally absorb more of the pool dilution. This simplified post-money pool model will not match that structure.

Should SAFEs and notes be included?

They should be included in a full cap-table model if they convert in the round. This calculator does not model conversion terms.