Model equity dilution for priced rounds, SAFEs, and convertible notes. See your cap table before and after investment. Free, no signup required.
Standard is 10,000,000 shares
Dilution occurs when a startup issues new shares to investors, reducing the percentage ownership of existing shareholders. For example, if you own 100% of 1 million shares and issue 250,000 new shares to an investor, you now own 80% of 1.25 million shares.
Pre-money valuation is what your company is worth before the investment. Post-money valuation equals pre-money plus the investment amount. A $4M pre-money with a $1M investment gives a $5M post-money valuation, meaning the investor gets 20% ownership.
A SAFE (Simple Agreement for Future Equity) does not create dilution immediately. It converts to equity at the next priced round, typically at a discount or valuation cap. This means the dilution impact is deferred and depends on the terms of the next round.
Most VCs expect a 10-20% option pool at the time of investment. The pool is typically created from pre-money shares, meaning it dilutes existing shareholders (founders) more than investors. A 15% pool is the most common at seed stage.