Equity Dilution Calculator

When this applies

• You are negotiating a round and want to see the dilution.
• You are comparing term sheets at different valuations.
• You want to check the ownership split after a new investment.
• You are planning how much to raise against the stake you are willing to give up.

INR 2,50,00,000 into a INR 10,00,00,000 pre-money company, from 60%

1. 1Post-money = 10,00,00,000 + 2,50,00,000 = INR 12,50,00,000.
2. 2Investor share = 2,50,00,000 / 12,50,00,000 = 20%.
3. 3Your stake after = 60% x (1 - 20%) = 48%.

The investor takes 20% and your stake falls from 60% to 48%.

What this calculator does

Work out how much of the company an investor gets for their money, and how much your own stake becomes, after a round.

How this is calculated

Post-money valuation is the pre-money valuation plus the investment. The investor's share is the investment divided by the post-money valuation. Your existing share is reduced in proportion: your ownership after the round is your current percentage multiplied by one minus the investor's share. The calculator shows the post-money figure and both percentages.

The formula

Investor % = investment ÷ (pre-money + investment)

Common mistakes to avoid

• Measuring the stake against pre-money

  The investor's share is measured against the post-money valuation. Using pre-money overstates their stake.

• Forgetting the option pool

  A pool created before or as part of the round dilutes you as well. The headline percentage is often not the final one.

• Treating valuation as cash in the bank

  The valuation is the price of the equity, not money the company receives. Only the investment is new money.

Frequently asked

What is pre-money and post-money?

Pre-money is the valuation before the new money; post-money is the pre-money plus the investment. The investor's share is measured against the post-money figure.

How is the investor's percentage calculated?

Investment divided by post-money valuation. INR 25,00,000 into a INR 10,00,00,000 pre-money company gives a post-money of INR 12,50,00,000 and a 20% stake.

Why does my stake fall?

New shares are issued to the investor, so the total grows and your existing shares represent a smaller fraction. You are not selling shares; you are being diluted.

Does an option pool dilute me too?

Yes. Options created for employees come out of the same pie and dilute existing holders. This calculator does not model a pool.

Is the valuation the price per share?

No. It is the total equity value implied. The price per share is the valuation divided by the fully diluted share count.