Round Dilution Calculator: What a Priced Round Does to Your Stake

How it is calculated.

Post-money = pre-money + amount raised.
Investor stake = amount raised / post-money.
Share kept by existing holders = 1 - investor stake - new pool share.
Your ownership after = your ownership before x share kept by existing holders.

Worked example.

$3M on $12M pre-money with a 5% pool

Step	Working
Post-money	$12,000,000 + $3,000,000 = $15,000,000
Investor stake	$3,000,000 / $15,000,000 = 20%
Kept by existing holders	100% - 20% - 5% = 75%
Your ownership after	70% x 0.75 = 52.5%, down 17.5 points

Dilution per round.

Founders often give up somewhere around 15% to 25% of the company per priced round, counting the new money and any pool increase together. Market data from cap table platforms has put typical seed and Series A dilution close to 20%, though it moves with the market and the company.

Why the pool counts against you.

When the term sheet says the pool must reach a target size on the post-money cap table, the new shares are usually created before the investor buys in. That means only existing holders are diluted by them. A 5% pool top-up is worth 5 points of the post-money that would otherwise stay with founders and earlier investors.

Negotiate the pool size from a hiring plan rather than a round number. Our option pool sizing tool turns a list of planned hires into a pool percentage.

SAFEs and notes convert too.

If you raised on SAFEs or convertible notes, they usually convert at the priced round, and they add to the dilution. Enter your ownership after those conversions, or run the SAFE and note tools first to find it.

Common mistakes.

Looking at the headline pre-money and ignoring that the pool top-up comes out of it.
Using ownership of issued shares instead of fully diluted ownership.
Leaving converting SAFEs and notes out of the before figure.
Optimizing for the highest valuation and accepting terms that cost more than the valuation gained.

Questions founders ask

How much dilution is normal in a seed round?

Commonly around 15% to 25%, including any pool increase. Rounds outside that range happen, but they are worth a second look at the size of the raise or the pool.

Is the option pool part of the pre-money or the post-money?

Term sheets usually set the pool as a percentage of the post-money but create it before the new money comes in, so it dilutes existing holders only. Read the clause closely; it changes your effective price.

Does the investor stake change if I raise more?

Yes. At a fixed pre-money, every extra dollar raised raises the investor stake. Raising $4 million instead of $3 million on $12 million pre-money moves the investor from 20% to 25%.