Business

Startup Dilution Calculator

Model your equity stake after multiple funding rounds. See how much you give up at each step, what exit value investors need to hit their return targets, and what your shares are worth at exit.

Founder & Option Pool Setup

Founder Shares (pre-round) Total shares issued to founders before any investment

Employee Option Pool (%) % of post-money cap table reserved for employee options

Seed Round

Seed Pre-Money Valuation ($)

Seed Amount Raised ($)

Series A (leave $0 to skip)

Series A Pre-Money ($)

Series A Amount Raised ($)

Series B (leave $0 to skip)

Series B Pre-Money ($)

Series B Amount Raised ($)

Exit Scenario

Target Exit Valuation ($) IPO, acquisition, or target exit value

Founder Equity (final round)

—

How Startup Dilution Works

Every funding round dilutes existing shareholders. When you raise at a $5M pre-money valuation and take $1M, you're selling 16.7% of the company. The next round dilutes everyone — founders and previous investors — equally on a percentage basis (absent anti-dilution provisions).

Post-Money Valuation = Pre-Money + Investment
Investor Equity % = Investment ÷ Post-Money Valuation
Founder Equity After Round = Previous % × (1 − Investor %)
Dilution per Round = Previous Founder % − New Founder %
Exit Value for N× Return = Investment × N ÷ Investor Equity %

Typical Dilution by Round

Friends & Family / Pre-seed: 5–10% given away
Seed round: 15–25% given away (YC takes 7% via SAFE)
Series A: 20–25% given away
Series B: 15–20% given away
Typical founder stake at IPO: 15–30% after all dilution

How much equity should I give up in a seed round?

The typical range is 15–25% for a seed round. Giving up less than 15% may signal you're not raising enough capital to reach your Series A milestones. Giving up more than 25% leaves founders too diluted for future rounds and can hurt motivation. The key metric is: does the round give you 18–24 months of runway to hit metrics that justify a Series A at 4–6× the seed valuation? YC's standard SAFE note takes 7% for $500K, implying a ~$7M valuation — the current market benchmark for strong seed-stage companies.

What is a fair pre-money valuation for a seed-stage startup?

In 2024–2025, typical seed valuations for US startups: pre-product (idea stage): $2–5M; post-MVP with early traction: $5–10M; post-revenue with $10K–$50K MRR: $8–20M. YC portfolio companies typically get $5–12M post-money on their first SAFE. AI/ML companies with strong technical founders often command premiums. The "right" valuation is one where: investors can realistically hit 10× (meaning they need a $100M+ exit on a $10M stake), and founders retain enough equity to stay motivated through Series A/B dilution. Avoid high valuations that create "valuation traps" — if your $20M seed valuation requires a $100M+ Series A to avoid a down round, you've set a high bar to hit in 18 months.