Equity Dilution Calculator
Estimate the impact of a funding round on the capital structure: price per share, number of new shares issued, and the percentage of dilution experienced by existing shareholders. The calculation is performed entirely in your browser.
How it works
During a funding round, the company issues new shares to the investor in exchange for their investment. The price per share is determined by dividing the pre-money valuation by the number of existing shares, which allows calculating how many new shares the investor receives and, consequently, what share of the company the historical shareholders now own.
What is pre-money and post-money valuation?
The pre-money valuation is the estimated value of the company before the new investment arrives. The post-money valuation is simply the sum of the pre-money valuation and the invested amount: it is the value of the company immediately after the funding round, once the new shares have been issued.
How can dilution be reduced during a funding round?
The higher the negotiated pre-money valuation relative to the amount raised, the lower the dilution of existing shareholders, since each issued share costs the new investor more. Mechanisms like warrants, anti-dilution clauses, or later rounds can also influence the final ownership split, but they are not taken into account in this simplified calculation.
This calculator provides a simplified estimate based on a standard common-stock funding round; it is no substitute for advice from a certified accountant, a business attorney or a financial advisor before finalizing a shareholders' agreement or a fundraise.
The calculation is performed entirely in your browser: no data entered is sent to any server.