Cap Table Dilution Calculator
See how a funding round dilutes existing shareholders: price per share, new shares, post-money valuation, and ownership split. Runs in your browser.
Post-round cap table
- Post-money valuation
- $10,000,000
- Price per share
- $1
- New shares issued
- 2,000,000
- Total shares after round
- 10,000,000
- Investor ownership
- 20.0%
- Existing holders (diluted to)
- 80.0%
- Dilution to existing holders
- 20.0%
Price per share = pre-money ÷ existing shares. New shares = investment ÷ price. Post-money = pre-money + investment, and the investor owns investment ÷ post-money. Existing holders are diluted by that same percentage. Note: investors often require a new option pool carved out pre-money, which dilutes founders further (not modeled here). Informational, not financial or legal advice.
About this tool
Raising a funding round issues new shares, which dilutes existing owners — and this calculator shows exactly how. From your existing shares outstanding, the pre-money valuation, and the new investment, it derives the price per share (pre-money ÷ existing shares), the number of new shares the investor receives (investment ÷ price), the post-money valuation (pre-money + investment), and the resulting ownership split. The core relationship is clean and worth internalizing: the investor's ownership equals their investment divided by the post-money valuation, and existing holders are diluted by exactly that percentage. So a $2M round at an $8M pre-money ($10M post) gives the investor 20% and dilutes everyone else from 100% to 80% of the company. One real-world wrinkle it flags but does not model: investors frequently require a new or expanded employee option pool to be created out of the pre-money valuation, which dilutes founders further before the investment even lands — the 'option pool shuffle.' Use it to understand offers and negotiate. It is informational, not financial or legal advice. Everything runs in your browser.
How to use it
- Enter existing shares outstanding and the pre-money valuation.
- Enter the new investment (round size).
- Read the price per share, new shares, post-money valuation, and ownership split.
- Remember a required option pool can dilute founders further.
Frequently asked questions
- How does a funding round dilute ownership?
- New shares are issued to the investor, increasing the total share count, so each existing share represents a smaller slice. The investor's percentage = investment ÷ post-money valuation, and existing holders are diluted by that same percentage.
- What is the difference between pre-money and post-money?
- Pre-money is the company's value before the investment; post-money is pre-money plus the new cash (post = pre + investment). Investor ownership is calculated on post-money, so a $2M investment at $8M pre-money is 2 ÷ 10 = 20%.
- How is price per share determined?
- Price per share = pre-money valuation ÷ existing shares outstanding. The investor then receives investment ÷ price-per-share new shares. This sets the share count that determines everyone's post-round percentage.
- What is the "option pool shuffle"?
- Investors often require creating or expanding an employee option pool as part of the deal, carved out of the pre-money valuation. This dilutes founders before the new money comes in, effectively lowering the true pre-money. It is a common negotiation point this simple model does not include.
- Is dilution bad?
- Not necessarily — owning a smaller percentage of a more valuable, better-resourced company can be worth far more than a larger share of a smaller one. The goal is that the capital grows the pie faster than your slice shrinks. Dilution is the cost of that capital.
- Is this financial or legal advice?
- No. Cap tables involve share classes, liquidation preferences, anti-dilution provisions, and legal terms not modeled here. Consult a lawyer and financial advisor for real fundraising.