In a startup, dilution is the mechanical decrease in the percentage of equity held by existing shareholders when new shares are issued to investors. With every funding round, your startup creates new shares that investors subscribe to in exchange for their capital contribution. Mathematically, your share in percentage terms goes down, even though its absolute value goes up since the company is now worth more after the transaction. As a startup founder, it is essential to distinguish dilution from loss of control: as long as you remain a majority shareholder (above 50%), you keep control over ordinary decisions; statutory minority thresholds (33%, 25%) further protect your minority rights. Dilution is therefore a normal mechanism of equity financing, not a negative signal in itself. What matters is to measure and anticipate it across your startup's entire funding journey. That is exactly what the tool above lets you do.
Startup Dilution CalculatorYour free fundraising simulator
Calculate your startup's dilution on your next funding round and visualize the evolution of your cap table. Free, no signup required.
How does it work?
In 3 steps: we start from the current composition of your cap table (you may already have raised). We then compute the Equity Value of your startup from its Enterprise Value and financial situation. Finally, we derive your dilution on the next round and the evolution of your cap table.
Dilution calculator
1
Current cap table
If you have already raised capital, enter the share currently held by the founders. By default, we assume founders hold 100% of the equity.
2
Equity Value calculation
Start from Enterprise Value (EV), then add cash, subtract debt, and adjust for working capital seasonality and any other one-off item.
Don't know your company's valuation? Use our valuation calculator.
Equity Value
1,031,500 €
This Equity Value automatically feeds the Pre-Money in Section 3.
Why compute dilution on Equity Value rather than Enterprise Value?
Enterprise Value reflects your startup's operating activity. But dilution is computed on the value of the shares actually exchanged, which incorporates cash and debt. Starting from Enterprise Value would understate dilution.
3
Dilution and cap table
Post-Money Valuation
1,231,500 €
% transferred to new investors
16.2%
% retained by founders
83.8%
83.8%
Founders 83.8%
Investors 16.2%
Evolution of your cap table
| Shareholder | Initial | After the round |
|---|---|---|
| Founders | 100.0% | 83.8% |
| New investors | — | 16.2% |
After this round, you will hold 83.8% of your company.
That is a 16.2% dilution from your starting point.
Keep in mind
This simulator applies a simple dilution method. It does not account for more specific clauses defined in shareholder agreements (e.g. full or partial ratchet), nor for any debt-to-equity conversions. For a simulation aligned with your actual cap table, SeedAngels supports you in preparing your fundraise.
Prepare your fundraise with SeedAngels
Business Plan, Pitch Deck and financial projections aligned with investor expectations. Built from your data, structured by fundraising experts.
Understanding dilution in a startup raising capital
The standard dilution calculation method used by all VC funds relies on two simple concepts: pre-money and post-money valuation. The pre-money valuation is the value attributed to your startup just before the new funds come in. The post-money valuation is that pre-money plus the amount raised. The formula for the percentage transferred is then: % Investors = Amount raised / Post-money. Worked example: your startup is valued at €1.2M pre-money and raises €300k. The post-money reaches €1.5M, and the investor holds 300,000 / 1,500,000 = 20% of the equity. You, the founder, are diluted by 20% and retain 80%. This is exactly the method applied by the calculator above, starting from the Equity Value that serves as the basis for the pre-money. Always verify in a term sheet which basis an investor uses to express their percentage: "20% post-money" and "20% pre-money" do not correspond to the same entry price.
If you have already raised capital, you are not the only one being diluted: all existing shareholders — founders and historical investors alike — are diluted proportionally by the new round. Example: you are 2 founders holding 80% in equal parts, business angels hold the remaining 20%, and you raise €500k on a €2M pre-money valuation. The new round represents 500 / 2,500 = 20% of the post-money equity. Existing shareholders collectively retain 80%, distributed pro rata: founders go from 80% to 64% (80% × 80%) and the business angels from 20% to 16%. That is exactly what the tool above computes as soon as you enter the share currently held by the founders in Section 1. Understanding this mechanism is essential when preparing a round: your previous investors will be diluted too, and their support often depends on the quality of the proposed round.