Angel Round Dilution Calculator
Calculate ownership changes after new investment
Investment Details
How to Use This Tool
Enter your pre-money valuation, the investment amount being raised, and your current ownership percentage. Select whether an option pool increase is included in this round. Click Calculate to see how your ownership will change after the investment closes.
Formula and Logic
The calculator uses standard venture capital formulas. Post-money valuation equals pre-money plus investment. Investor stake is calculated as investment divided by post-money valuation. Your new ownership percentage accounts for both the new money and any option pool expansion, which further dilutes existing shareholders.
Practical Notes
- Higher pre-money valuations reduce dilution but may be harder to justify to investors
- Option pool increases are typically included in the pre-money calculation, diluting founders before investment
- Consider negotiating for anti-dilution provisions if raising multiple rounds
- Factor in liquidation preferences when modeling exit scenarios
- Keep detailed records of all calculations for tax and legal purposes
Why This Tool Is Useful
Understanding dilution helps founders make informed decisions about fundraising timing, valuation targets, and equity allocation. It also enables investors to model potential returns and negotiate better terms. This calculator provides quick scenario modeling without complex spreadsheet setup.
Frequently Asked Questions
How does an option pool increase affect my ownership?
An option pool increase creates additional shares that dilute all existing shareholders proportionally. If a 10% pool is added post-money, your ownership percentage decreases even before considering the new investment.
Should I include the option pool in pre-money or post-money?
Most term sheets specify option pool increases as post-money, meaning the pool expansion happens after the investment. This is more founder-friendly as it reduces the immediate dilution impact.
What's a typical dilution percentage for angel rounds?
Angel rounds typically result in 10-25% dilution depending on the valuation and investment size. Early-stage companies may experience higher dilution percentages as they need more capital relative to their valuation.
Additional Guidance
Consider running multiple scenarios with different valuations and investment amounts to understand the range of possible outcomes. Track your ownership percentage across multiple funding rounds to maintain meaningful equity stakes. Consult with legal and financial advisors before finalizing any investment terms.