Is dilution the same as losing value?

No. Dilution reduces your percentage, not necessarily your value. Owning 33% of a company valued at £20m is worth more than 42% of one valued at £16m. Dilution matters when the percentage itself matters: control thresholds, consent rights and the size of your position at exit.

Should the option pool increase come before or after the money?

It is a negotiated point. A pre-money pool is absorbed by existing holders and effectively lowers the price the investor pays; a post-money pool is shared by everyone including the new investor. This calculator models the pre-money case, which is the market default.

Why is my ownership lower than the simple percentage suggests?

Because the fully diluted count includes granted options, the unissued pool and often converting instruments. Percentages calculated on issued shares alone always look better than the number an investor will use.

Free tool

Dilution calculator

Enter your fully diluted share count, the pre-money valuation, the amount being raised and any option pool increase. The calculator returns the price per share, the shares issued, and your ownership before and after the round.

Fully diluted shares before the round

Pre-money valuation

Amount raised

Your shares

Optional

Option pool after the round (%)

Optional. Created pre-money, so existing holders absorb it.

Post-money valuation: 20,000,000
Price per share: 1.684211
New shares issued: 2,375,000
Fully diluted shares after: 11,875,000
Investor ownership: 20.00%
New option pool shares: 0
Ownership taken by the pool increase: 0.00%
Your ownership before: 42.11%
Your ownership after: 33.68%
Dilution (percentage points): 8.42

How this is calculated

Post-money valuation = pre-money valuation + amount raised.
An option pool increase is modelled pre-money: the new pool shares are added before pricing, so existing holders absorb them and the price per share falls.
Price per share = pre-money valuation ÷ (fully diluted shares + new pool shares).
New investor shares = amount raised ÷ price per share.
Your ownership after = your shares ÷ post-round fully diluted shares.
Converting SAFEs and notes are not included here — model those with the SAFE calculator or on your real cap table.

Worked example

A company with 9,500,000 fully diluted shares raises £4m at a £16m pre-money valuation. Price per share is £1.684, the investor receives 2,375,000 shares and holds 20% of the £20m post-money company. A founder with 4,000,000 shares goes from 42.1% to 33.7% — 8.4 percentage points of dilution. Adding a 10% post-round pool takes the same founder to roughly 30.3%.

Assumptions

One class of shares priced in a single round, with no existing convertible instruments outstanding.
Any option pool increase is created pre-money, before the new investor is priced in.
The share count you enter is fully diluted: issued shares plus granted options plus the unissued pool.
No secondary purchase forms part of the round, so every new share is newly issued.

Limitations

Does not convert SAFEs or notes — use the SAFE calculator for those.
Ignores liquidation preferences, participation and anti-dilution, which change value rather than percentages.
Ignores share class differences, warrants and rounds that close in tranches.
A percentage is not a valuation: dilution here says nothing about what your stake is worth at exit.

Prepared by Perseids for general information. This tool runs on the numbers you enter, stores nothing and uses no company data. Results are illustrative and are not legal, tax or investment advice.

Run the same model on your real cap table, with your actual instruments.

Model this on your actual cap table in Perseids

Frequently asked questions

Is dilution the same as losing value?: No. Dilution reduces your percentage, not necessarily your value. Owning 33% of a company valued at £20m is worth more than 42% of one valued at £16m. Dilution matters when the percentage itself matters: control thresholds, consent rights and the size of your position at exit.
Should the option pool increase come before or after the money?: It is a negotiated point. A pre-money pool is absorbed by existing holders and effectively lowers the price the investor pays; a post-money pool is shared by everyone including the new investor. This calculator models the pre-money case, which is the market default.
Why is my ownership lower than the simple percentage suggests?: Because the fully diluted count includes granted options, the unissued pool and often converting instruments. Percentages calculated on issued shares alone always look better than the number an investor will use.