How It Works
This calculator works in 4 steps.
Enter the pre-money valuation
Type the agreed company value before the investment.
Enter the investment
Type the total new money in the round.
Enter the pre-money fully diluted shares
Type all shares, options, and reserved pool counted before the round, per the term sheet.
Read the results
The calculator returns price per share, new shares, post-money valuation, and each holder's new percentage.
The Formula
The formula derives the share price from the pre-money valuation and divides the investment by that price.
PPS = Pre-money / S_preS_new = Investment / PPSPost = Pre-money + Investmentf = Pre-money / Post- S_pre:
- Pre-money fully diluted shares
- PPS:
- Price per share
- S_new:
- Shares issued to investors
An $8M pre-money round raising $2M with 10,000,000 pre-money shares sets PPS at $0.80 and issues 2,500,000 shares. Post-money is $10M, investors own 20%, and existing holders keep 80% of their prior percentages.
Conversion Table
The conversion table gives price, new shares, post-money, and investor ownership for 5 priced rounds.
| Pre-money | Investment | Price per share | New shares | Post-money | Investor ownership |
|---|---|---|---|---|---|
| $8M | $2M | $0.80 | 2,500,000 | $10M | 20% |
| $20M | $5M | $2.00 | 2,500,000 | $25M | 20% |
| $4M | $1M | $0.50 | 2,000,000 | $5M | 20% |
| $50M | $10M | $2.50 | 4,000,000 | $60M | 16.7% |
| $12M | $3M | $2.00 | 1,500,000 | $15M | 20% |
What Is the Financing Round Dilution Calculator?
The Financing Round Dilution Calculator is a tool that models ownership changes in a priced equity round from the pre-money valuation, the investment amount, and the pre-money fully diluted share count. The new investors' ownership equals the investment divided by the post-money valuation.
In a priced round, the price per share equals the pre-money valuation divided by the pre-money fully diluted shares. The new shares equal the investment divided by that price. Every existing holder is diluted by the same factor: pre-money ÷ post-money. The calculator returns a before-and-after table. It covers the arithmetic only; term sheets add terms, such as liquidation preferences, that this tool does not model.
Common Uses
There are 5 main uses of this calculator.
Term sheet review
Founders check price and ownership in a proposed round.
Cap table planning
Finance teams model successive rounds.
Round sizing
Founders compare raising $2M versus $3M at one valuation.
Employee updates
Companies explain dilution to option holders.
Venture finance teaching
Instructors show pre-money and post-money math.