Equity Dilution Calculator
See how a new funding round dilutes your ownership — your stake before and after, the investor’s slice, and the dilution factor.
How it works
Post-money = pre-money + investment · Dilution factor = pre-money ÷ post-money · New stake % = old stake % × dilution factor · Investor % = investment ÷ post-money × 100
A priced round issues new shares, so every existing holder keeps the same number of shares but a smaller slice of a bigger pie. The dilution factor is pre-money ÷ post-money — the fraction of your old stake you keep. The new investor takes investment ÷ post-money, and that same percentage is carved proportionally out of everyone who was already on the cap table.
Worked example
You own 20% before a round that raises $2,000,000 at an $8,000,000 pre-money, for a $10,000,000 post-money. The investor takes 2M ÷ 10M = 20%. Your 20% is multiplied by the 0.8 dilution factor, falling to 16%.
Frequently asked questions
Does dilution mean I own fewer shares?
No — you keep exactly the same share count. Dilution issues new shares to the investor, so the total grows and your fixed shares represent a smaller percentage of the company.
Is dilution always bad?
Not if the capital grows the company. Owning 16% of a business worth $10M after the round ($1.6M) beats 20% of the $8M it was worth before ($1.6M) only breaks even — the raise has to increase value for dilution to pay off.
Does the investor’s percentage come only from founders?
It is spread across everyone on the cap table in proportion to their holdings — founders, earlier investors and vested option holders all dilute by the same factor, unless anti-dilution or a fresh option pool changes the split.
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Educational estimate, not financial, tax or investment advice.