Free founder tool
Startup dilution calculator
See how much of your company you keep after each funding round, including the option pool investors ask for. Change the numbers below; the example is a typical Indian path from pre-seed to Series A.
| Round | Raise (₹ crore) | Pre-money (₹ crore) | Pool after round (%) | |
|---|---|---|---|---|
After Series A
Founders own 42.3%
Worth ₹84.6 Cr on paper, at a post-money valuation of ₹200 Cr.
- Founders
- Pre-seed investors
- Option pool (ESOP)
- Seed investors
- Series A investors
| Holder | At founding | Pre-seed | Seed | Series A |
|---|---|---|---|---|
| Founders | 100.0% | 80.0% | 56.0% | 42.3% |
| Pre-seed investors | – | 20.0% | 14.0% | 10.6% |
| Option pool (ESOP) | – | – | 10.0% | 12.0% |
| Seed investors | – | – | 20.0% | 15.1% |
| Series A investors | – | – | – | 20.0% |
How dilution works
A priced round creates new shares and sells them to investors. The investors' share is the money they put in divided by the post-money valuation: the pre-money valuation plus the new money. Raise ₹8 crore at a ₹32 crore pre-money and the post-money is ₹40 crore, so the new investors own 20%. Everyone who owned shares before keeps the same number of shares, but each now represents 20% less of the company.
Dilution compounds. Two rounds that each sell 20% leave founders with 0.8 × 0.8 = 64% of whatever they held before the first one. That is why the size of each round matters more than any single valuation headline.
The option pool shuffle
Most term sheets ask for an employee option pool, often 10–15% of the company after the round, to be in place before the investment. Creating or topping up the pool then dilutes only the existing holders, not the new investor. In the calculator, set “Pool after round” to the target in the term sheet to see the effect: in the example, the seed money takes 16 points of the founders' share and the 10% pool takes another 8.
Worked example
Two founders split 100%. They raise ₹1.5 crore at ₹6 crore pre-money (investors get 20%), then ₹8 crore at ₹32 crore with a 10% pool (investors 20%, pool 10%), then ₹40 crore at ₹160 crore with the pool topped up to 12%. After Series A the founders together own about 42% of a ₹200 crore company: a smaller slice of something much larger.
Want the vocabulary behind these numbers? Read our explainers on pre-money and post-money valuation, funding stages and ESOP vesting.
Frequently asked questions
- How is dilution calculated?
- New investors receive the amount they invest divided by the post-money valuation (pre-money plus the new money). Every existing holder's percentage shrinks by the same factor. If a round sells 20% of the company, a founder holding 60% before it holds 48% after.
- Does dilution mean founders lose money?
- Not necessarily. Founders own a smaller percentage of a company that should be worth more. If a round raises the valuation faster than it shrinks the founders' share, their stake is worth more on paper, which the calculator shows after the last round.
- Why does the option pool matter so much?
- Investors often ask for the employee option pool to be created or topped up before their money comes in, so the cost falls on existing holders rather than on them. A 10% pool created that way can cost founders as much as a small extra round.
- How much dilution is normal per round?
- Rounds commonly sell somewhere between 10% and 25% of the company, with early rounds at the higher end. The right number depends on how much money the next milestone needs; raising more than that mostly buys dilution.
- Do SAFEs and convertible notes dilute founders?
- Yes, when they convert, usually at the next priced round. Model them as part of that round: add the SAFE or note amount to the raise, priced at the valuation cap or discount it converts at.
The calculator models priced rounds and pre-money option pool top-ups. Real cap tables also carry convertible instruments, anti-dilution terms and secondary sales; treat the results as an estimate, not advice.