Founder Equity Dilution Calculator
Calculate founder dilution from a single funding round.
Project founder dilution across multiple funding rounds from pre-seed to Series B.
Formula
Post-Money Valuation = Pre-Money + Investment. Investor Ownership = Investment / Post-Money. Founder Post-Round = Current Ownership x (1 - Investor %) x (1 - Option Pool %). Dilution compounds across rounds.
Frequently Asked Questions
How much equity do founders typically give up in each round?
Founders typically give up 15-25% per funding round. Pre-seed rounds dilute 10-20%, seed rounds 15-25%, and Series A rounds 15-25%. Including option pool expansion, total dilution per round is often 25-35%. After three rounds, founders typically retain 20-40% ownership collectively.
What is an option pool and how does it affect dilution?
An option pool is a block of shares reserved for employee compensation, typically 10-20% of the company. Investors usually require the option pool be created from the founders' shares before investment (pre-money), increasing effective founder dilution beyond just the investment percentage.
How can founders minimize equity dilution?
Founders can minimize dilution by bootstrapping longer before raising, negotiating higher valuations, raising smaller rounds, using revenue-based financing, negotiating post-money option pool creation, and demonstrating strong traction to command premium valuations.
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