Startup Equity Dilution Calculator
Model share dilution across an investment round and see your cap table before and after the money lands. Free, instant, and no sign-up.
What is equity dilution?
Equity dilution is the drop in the percentage each shareholder owns when the company issues new shares. You do not lose shares — you still hold exactly the same number. What changes is the total, so your slice of the whole gets smaller.
Share dilution happens at every investment round, when you top up the option pool for the team, and when a convertible note converts. It is the normal cost of raising money, and it is not bad in itself: a smaller percentage of a bigger company is usually worth more than the percentage you had before.
The trouble starts when dilution has not been planned. Founders reach Series A below the threshold the next investor expects, or an option pool gets carved out of the pre-money valuation without anyone noticing. That is why it is worth modelling before you sign.
You will see this tool called a few different things — a share dilution calculator, a startup dilution calculator or a cap table dilution calculator. They all describe the same maths: what happens to each shareholder's percentage when new shares are issued.
How to read your cap table results
The table the calculator returns has four readings, and each answers a different question:
- Percentage before and after: your weight in the company on each side of the round. The gap between the two is your dilution.
- Shares: unchanged for existing shareholders. If it looks odd to see the same number against a different percentage, that is precisely what dilution means.
- Economic value: your percentage applied to the post-money valuation. This is the figure that usually goes up even as the percentage goes down.
- ESOP: switch the pool on and you will see whether it is created before or after the money. Pre-money, the founders pay for it; post-money, everyone does. It is one of the most argued-over lines in a term sheet.
The calculator assumes a plain equity round and does not model liquidation preferences or anti-dilution clauses. For those, talk to us.
What is this calculator for?
If you're going to raise capital for your startup, you need to understand what it means in terms of dilution. This calculator lets you simulate how the share capital is redistributed after an investment round and what stake each partner will retain.
We show you the before and after. No complex formulas or endless Excel sheets. Just the data that matters: post-money participation, dilution percentage per partner, and updated economic value.
Use it before sitting down with investors. It will give you clarity, strength to negotiate, and vision to decide. And if you want us to help you structure the round, you know where we are.
What can you calculate with this tool?
- Post-money participation of each partner.
- Individual dilution percentage.
- Investor participation after the round.
- Comparative table before and after investment.
- Economic value of each stake after the round.
- Chart visualization of the new capital structure.
You can also prepare the system to simulate future rounds and track the impact of your growth strategy.
How does the calculator work?
You just need to enter the following data:
- Number of partners and shares of each one.
- Current share capital (amount).
- Pre-money valuation of the company.
- Amount of investment to be contributed.
With that, you'll automatically get the key results of the post-money cap table: how much each partner keeps, how much the investor gets, how much your share is worth now.
Additionally, you can export the results and use the table for presentations, negotiations, or internal decisions.
Practical example of dilution explained simply
Imagine your startup is formed by 3 partners. Before seeking investment, they have these stakes:
- Partner A: 40%
- Partner B: 40%
- Partner C: 20%
You receive an investment offer: an investor wants to put €500,000 into the company, valuing it at €2,000,000 before investment (this is called pre-money valuation).
When that money comes in, the investor will have 20% of the company (because 500,000 is 20% of €2,500,000 post-money). Current partners now split the remaining 80% among themselves, in the same proportion as before:
- Partner A: 32%
- Partner B: 32%
- Partner C: 16%
Although no one has lost shares, their percentage has been reduced. That's dilution. In return, they now have a stronger company, with capital to grow, and their stake (although smaller) is worth more.
This is how the new distribution looks:
| Participant | Before the round | After the round |
|---|---|---|
| Partner A | 40% | 32% |
| Partner B | 40% | 32% |
| Partner C | 20% | 16% |
| New investor | – | 20% |
Conclusion? Dilution isn't bad if you know what you're signing. The important thing is that the numbers are clear and the round is done thoughtfully. That's what we're here for.
Interactive Calculator
1.Founders data
2.Company financial data
Do you know the pre-money valuation?
3.ESOP (optional)
💡 Usage Instructions
- • Enter the names and initial shareholdings of all founding partners
- • Fill in the current share capital, pre-money valuation and investment amount
- • Enable ESOP if you plan to reserve a percentage for employees (10-20% is typical)
- • The table will automatically show pre-money, post-money and fully diluted percentages
- • You will also see the economic value of each stake and the dilution level per partner
Do you want help structuring your round properly?
This tool is the first step. But if you're going to raise capital for real, you need a well-thought shareholders' agreement, solid documents, and a legal strategy aligned with your growth.
At Satya Legal we help you structure your round sensibly. We protect your startup and negotiate with you, not against you.
Frequently asked questions about dilution and rounds
What is dilution after a round?
Dilution is the reduction in percentage that each partner has when new shares are issued for an investor. It's normal and part of the game, but it needs to be understood and managed.
How can I reduce dilution?
By negotiating the valuation well, structuring the round sensibly, and ensuring your cap table is optimized. And, of course, with good legal advice.
Can I use this calculator if there are multiple investors?
Yes. Simply group the total capital they're going to contribute. For more complex scenarios, you can contact us and we'll simulate the scenario with you.
What is pre-money and post-money valuation?
Pre-money valuation is the company's value before receiving investment. Post-money equals pre-money plus the invested capital. For example, if your startup is worth €1M (pre-money) and an investor puts in €250K, the post-money will be €1.25M and the investor will hold 20%.
What happens to my stock options or phantom shares in a round?
Stock options and phantom shares are diluted just like ordinary shares, unless the shareholders' agreement includes anti-dilution clauses. It's essential to review the option pool before closing a round. Our calculator helps you visualize the impact.
Contact us
We're here to help you grow your business. Leave us your details and we'll get in touch with you.
First consultation free
No commitment, we talk about your project
Fast response
We respond in less than 24 hours
Send us a message
We will respond as soon as possible
Sending...
Please wait a moment...