Startup equity dilution calculator
Raising capital can feel complicated, but it is really just about deciding who owns what as your startup grows.
Pre-money valuation is what your company is worth before new money comes in. If investors put money in after that, your company’s value increases, and that is called post-money valuation.
An option pool is a slice of shares you set aside for future employees. Founders usually create or top up this pool before a new round, which slightly reduces their ownership.
A cap table is your ownership table. It shows how much each founder, investor, and employee owns at every stage.
Startup stages usually follow a similar path: Pre-seed, Seed, Series A, Series B, and so on. Each round brings more money, more investors, and more dilution.
Dilution just means your percentage goes down, even if the company becomes more valuable overall.
We built this calculator to make all of this visual and easy to understand, so you can see in real time how every decision changes your ownership.
Seed Round Example, Bowora
Bowora is currently in the seed stage. At this point we already have a working product, early users, and some initial traction. What we need now is fuel to grow faster, improve revenue, and get ready for the next funding round.
We assume a seed valuation of $2,000,000, which sits in the typical range for early startups. Before bringing in new money, we set aside a 15% option pool for future hires, which is standard practice for seed investors.
In this round, we are raising $200,000 to cover the next 12 months. About 60% of this will go to marketing to acquire users and build awareness, and 40% will go to hiring and other operating costs.
On the right side of the image you can see what this means in practice. The big circle shows the post-money value of the company, $2.2M, which includes our $2M valuation plus the new $200K investment.
Series A Example, One Year Later
After one year, let’s imagine Bowora executed well. We grew traction, improved revenue, and proved that the model works. Because of this progress, our valuation increased from $2M to $5M.
At this stage we move from Seed to Series A. Instead of raising a small bridge to survive, we are now raising $2M to scale the business, hire more team members, and expand marketing and product.
We keep the 15% option pool in place for future hires, so we are ready to attract strong talent as we grow.
What the chart shows
The big circle now represents a $7M post-money valuation, which is our $5M pre-money value plus the new $2M investment.
The blue section shows Nima and Shayan together. Their percentage is smaller than before, but the actual dollar value of their shares is much higher because the company is now worth more.
The purple slice is the new Series A investor, who owns about 28.6% in exchange for the $2M investment.
The orange slice remains the 15% option pool for future employees.
The small green slice represents earlier investors from the seed round.
Overall, the chart makes one key point very clear: founders own a smaller percentage over time, but they own a much more valuable company.
Try it yourself
If you want to try this yourself, you can use the chart at: https://bowora.com/dilution-calculator
You do not need to log in to use it, we do not store your data, and if you want to keep your results you can just take a screenshot.
While you are on Bowora, check out the Startup Weekly Board . You can give stars and reviews to startups you like, which helps them get more visibility and grow faster.
