Startup dilution and cap table calculator
Two founders start with 88.9% of a company and 11.1% in an option pool. Two post-money SAFEs take 13.1%, a $4 million Series A at a $15 million pre-money valuation takes 21.1%, and a $12 million Series B at $45 million takes another 21.1%, with pool top-ups along the way. The founders end at 44.8%, half of where they began. Their stake is still worth $25.6 million, because the company’s implied valuation rose from $19 million to $57 million.
The calculator runs the stages in the order they happen: SAFEs convert, the pool is topped up, and each priced round closes. It shows ownership for every holder after every stage, the dilution in relative terms and in points, the price per share, and what the stake is worth at each round.
Who holds shares today
Post-money SAFEs (they convert in the first priced round)
Priced rounds (leave the investment at 0 to skip a round)
Founders after the last round
44.8%
Founders at the start
88.9%
Total dilution of the stake
49.6%
Founders’ share of an exit
$134,498,450
Ownership after each stage (fully diluted)
| Holder | Start | SAFEs converted | Round 1 | Round 2 |
|---|---|---|---|---|
| Founder 1 | 55.6% | 48.3% | 35.8% | 28.0% |
| Founder 2 | 33.3% | 29.0% | 21.5% | 16.8% |
| SAFE 1 | — | 10.0% | 7.4% | 5.8% |
| SAFE 2 | — | 3.1% | 2.3% | 1.8% |
| Round 1 investors | — | — | 21.1% | 16.5% |
| Round 2 investors | — | — | — | 21.1% |
| Option pool | 11.1% | 9.7% | 12.0% | 10.0% |
| Founders combined | 88.9% | 77.2% | 57.2% | 44.8% |
| Relative dilution of the founders’ stake | — | 13.1% | 25.9% | 21.7% |
| Change in percentage points | — | -11.7 | -20.0 | -12.4 |
| Price per share | — | — | $1.3590 | $3.1943 |
| Founders’ stake at that price | — | — | $10,872,129 | $25,554,705 |
| Stake value vs. the previous roundAbove 1.0× the stake is worth more despite the dilution. | — | — | — | 2.35× |
Check
Start: 9,000,000 shares, 100.00% · SAFEs converted: 10,359,712 shares, 100.00% · Round 1: 13,980,702 shares, 100.00% · Round 2: 17,844,072 shares, 100.00%
SAFE holders together own 13.13% of the company just before the first priced round, measured before its new money and pool increase.
Post-money valuation-cap SAFEs only. Discount-only SAFEs, MFN, pre-money SAFEs and notes are not modeled, and neither are liquidation preferences, participation, anti-dilution, secondary sales or vesting. The exit figure multiplies the founders’ share by the exit value and ignores preferences, so treat it as an upper bound. Not legal or investment advice.
A cap table and dilution workbook with the same model: holders, SAFEs and three rounds by stage, ownership per holder, relative dilution and points, the price per share, the founders’ stake value, and a check row that must read 100%. Every formula is editable.
Download the workbookWho reaches for this
Wants to see where ownership lands after a seed, an A and a B, before agreeing to terms.
Needs to know how much of the company the SAFEs will take when they convert.
Wants to understand how the shares or options they hold get diluted over time.
Wants to see what a stake becomes after later rounds and pool refreshes.
Needs the sequence and formulas for converting SAFEs and closing priced rounds.
How this startup dilution calculator works
The model is a cap table that advances through stages. It starts with founders, other holders and the existing option pool. If there are SAFEs, it converts them into shares at the first priced round. Then, for each priced round, it creates or tops up the option pool, issues the new investor’s shares, and records the price per share. After each stage it recalculates every holder’s share of the fully diluted total.
Every stage has a check: the ownership percentages must add to 100%. If they do not, an input or a formula is wrong, and the calculator shows the sums so you can see it. The same mechanics for a single round, with a comparison of pool timing, are on the pre and post-money valuation calculator. This page chains rounds together.
Dilution, measured two ways
Two conventions are in use, and mixing them causes most of the confusion about dilution. Relative dilution is the proportion of a stake that is lost: a holder who goes from 57.22% to 44.83% has lost 21.7% of the stake. The percentage-point change is the simple difference, 12.4 points. Both are correct. They answer different questions.
Relative dilution is the one that compounds. If each round dilutes a stake by 20%, the holder keeps 80% of it after one round and 64% after two, because each round takes 20% of what is left, not 20% of the original. Percentage points do not compound in the same way, which is why a founder can lose 20 points in the first round and 12 in the second and still have been diluted by a similar proportion each time. This page uses relative dilution and shows the points beside it.
A caution on other sources. Some tables label the point change as “dilution,” and a drop from 38.6% to 30.9% appears as “7.7% dilution” when it is 7.7 points and 20% in relative terms. When you read a dilution figure, check which one it is. The investor’s percentage in a round, investment divided by post-money, is the relative dilution of everyone who held shares before it, when there is no pool.
The order of events: SAFEs, pool, priced round
The sequence matters, because each step changes the base that the next one is measured against. In a round where SAFEs convert and the pool is topped up, the order is fixed.
Post-money SAFEs turn into shares at the priced round’s terms. Each holder owns its purchase amount divided by its cap, measured on the company’s capitalization before the round’s new money and before the round’s pool increase.
If the term sheet puts the pool in the pre-money, it is created before the investment. The total pool after the round equals the target percentage, and only the shortfall is new.
The investor receives the number of shares that gives the agreed percentage of the fully diluted total after the round. The price per share is the post-money valuation divided by that total.
The formulas follow from the order. Let E be the shares held by everyone except the pool, P the existing pool, s the sum of purchase amount ÷ cap over all SAFEs, t the target pool share after the round, and i the investor’s share, investment ÷ (pre-money + investment). The company capitalization when SAFEs convert is (E + P) ÷ (1 − s). After conversion, the round’s total shares are E′ ÷ (1 − t − i), where E′ is E plus the SAFE shares, if the pool must be topped up. Existing shares, the pool and the investor’s shares then add to the total exactly, which is the check.
Post-money SAFEs in a cap table
A post-money SAFE fixes the holder’s percentage. A $500,000 SAFE at a $5 million post-money cap owns $500,000 ÷ $5,000,000 = 10.0% of the company capitalization. A $250,000 SAFE at an $8 million cap owns 3.125%. Together the two SAFEs own 13.125%, and the founders and pool own the remaining 86.875%.
In the example, the founders hold 8,000,000 shares and the pool 1,000,000, so the pre-SAFE capitalization is 9,000,000 shares. The company capitalization is 9,000,000 ÷ 0.86875 = 10,359,712 shares. The first SAFE receives 10.0% of that, 1,035,971 shares, and the second 3.125%, 323,741 shares. The founders’ combined stake falls from 88.9% to 77.2%, which is 13.1% relative dilution and 11.7 points, before the priced round has added a dollar.
What happens to the SAFE holders next
Their percentage is set at conversion, and it does not stay there. The round’s new shares and the pool increase dilute them like everyone else. The first SAFE’s 10.0% becomes 7.4% after the Series A and 5.8% after the Series B. The post-money SAFE protects the holder from dilution by other SAFEs, not from the priced round.
This calculator models post-money SAFEs with a valuation cap, the standard form. SAFEs with only a discount, most-favored-nation clauses, pre-money SAFEs and convertible notes convert differently and are not modeled. The SAFE note calculator and the convertible note calculator handle cap versus discount and note interest. If your SAFEs are of another kind, convert them there and enter the resulting shares as other holders.
Option pool refreshes across rounds
The pool is topped up at each round because hiring continues. The target is a share of the fully diluted company after the round, and the existing pool counts toward it. If the pool is already large enough, nothing is added. In the example, the first round targets 12%. The pool starts at 9.65% after the SAFEs convert, so it is topped up. The second round targets 10%. After the first round the pool is 12.0%. The Series B investors’ shares would dilute it to about 9.5%, so it is topped up to 10.0%.
A pool created before the investment dilutes only the existing holders. When it is created after, everyone shares the cost, including the new investor. In this example, creating each pool after the investment instead of before leaves the founders at 45.6% instead of 44.8%, three-quarters of a point. The effect compounds over rounds, and the term is worth negotiating, as the pre and post-money page shows for a single round. Sizing the pool to the hiring plan is worth more than the timing. A smaller target of 8% and 6% instead of 12% and 10% leaves the founders at 47.9%.
What it means for employees and advisers
Everyone who holds shares or options is diluted in the same proportion. An employee with 100,000 options at the Series A holds 0.715% of the company, 100,000 out of 13,980,702 shares. After the Series B, the same 100,000 options are 0.560% of 17,844,072 shares, a 21.7% relative reduction, the same as the founders’ in that round. The number of options has not changed. What has changed is the size of the company they are a share of.
That is why pool refreshes matter to employees as well as to founders. A larger pool means a larger company in shares, so each existing grant is a smaller percentage, but it also funds the grants that keep the team together. Employees looking at an offer should ask what percentage the grant is on a fully diluted basis, the strike price, and how many rounds the company expects to raise, because the percentage on the offer letter is not the percentage at a sale.
A worked example, stage by stage
The example uses two founders with 5,000,000 and 3,000,000 shares, a 1,000,000-share pool, the two SAFEs above, a $4 million Series A at a $15 million pre-money valuation with a 12% pool, and a $12 million Series B at a $45 million pre-money valuation with a 10% pool. The pool is created before each investment.
The total shares after each stage are 9,000,000, 10,359,712, 13,980,702 and 17,844,072. The Series A price per share is $19,000,000 ÷ 13,980,702 = $1.3590, and the Series A investors hold 2,943,306 shares. What matters is the pattern. The founders’ relative dilution is 13.1% at conversion, 25.9% in the Series A and 21.7% in the Series B, and their stake falls from 88.9% to 44.8%, a 49.6% relative reduction. The Series A dilutes the founders by more than the investors’ 21.05% because the pool top-up to 12% happens in the same stage.
Reading the table
Three patterns are worth reading off it. First, group the holders by role. After the Series B, the founders hold 44.83%, the two SAFEs together 7.62%, the two rounds of investors 37.54% and the pool 10.00%. The people who are not the founders own 55.17% of the company, and no single line shows it.
Second, notice how the stake of an early holder fades. The SAFE holders’ combined share is 13.13% at conversion, 9.73% after the Series A and 7.62% after the Series B. Their dollars are in the company at a low price, so their stakes are worth far more than they cost, but their share of the vote and of a sale shrinks with each round. Third, the pool moves in the opposite direction to everyone else. It is refreshed to hold its target, so it is the only line that is topped up while the others are diluted.
Dilution vs. value: the step-up you need to stand still
A stake’s value is its ownership percentage times the company’s value, so dilution and growth pull in opposite directions. To keep the stake worth the same after a round that dilutes it by d, the company’s value has to rise by a factor of 1 ÷ (1 − d).
In the example, the founders’ 57.22% after the Series A is worth $10.87 million at the $19 million implied valuation. After the Series B their 44.83% is worth $25.55 million at the $57 million implied valuation. The valuation rose 3.0 times while the stake shrank by 21.7%, so the stake’s value rose 2.35 times. The 1.28-times growth needed to stand still was cleared comfortably.
This is the way to read a dilutive round. Founders who ask “how much am I giving up?” should also ask “how much must the company grow to make it worth it?” A round that dilutes by 25% needs a third more value to break even. A down round is the case where value falls and dilution rises together, which is why anti-dilution protection for earlier investors matters to the founders left with less.
The same model in a down round
Change one number. Suppose the Series B raises the same $12 million at a $12 million pre-money valuation instead of $45 million. The implied valuation after the round is $24 million, and the pre-money is 0.63 times the Series A’s $19 million post-money, so it is a down round. The price per share falls from $1.3590 to $0.7803. The Series B investors take 50.0% of the company, and the founders drop from 57.2% to 26.0%. Their stake is worth $6.24 million against $10.87 million before, 0.57 times as much.
The calculator does not model anti-dilution provisions, and those matter in exactly this case. A broad-based weighted average adjustment would give the Series A investors extra conversion shares, taking more from the founders and the pool. Whatever the protection in your documents, the direction is the same: a down round dilutes by more and reduces the value of the stake, and the two together are what founders should weigh against the cash they need.
Reading founder-retention benchmarks
Many pages publish a “typical” founder ownership by stage, and the numbers differ from page to page because they rest on different samples, eras and definitions. Treat them as anecdotes. A better method is to set your own target and see what it allows.
Start with the ownership you want when the company is sold or listed, and the number of priced rounds you expect. The founders’ retained share of their starting stake is the product of one minus each round’s relative dilution. With the same dilution each time, that is (1 − d) raised to the number of rounds.
These are shares of the starting stake, not of the company, and they include only the priced rounds. SAFEs, pool top-ups and any rounds of employee equity take more. A founder who starts at 90% and wants to hold 40% after four rounds can afford about 18% dilution per round on average. Set that beside the round sizes you would need, and the calculator will say whether the plan fits.
Ways to reduce dilution
Five levers change the final ownership. Here is what each does on the same example, where the founders end at 44.83% after the Series B.
Raising less and raising at a higher valuation have the same effect on the investor’s share: $3 million at $15 million pre-money and $4 million at $20 million both take 16.7%. The first cuts the amount, and the second raises the price. Which one is available depends on the market and on how much runway the money buys, and the runway calculator shows what a smaller raise costs in months.
The SAFE line is not an argument against SAFEs. The example’s SAFEs raised $750,000 that the company needed earlier, and the comparison assumes the same capital arrives without them. It shows their cost in ownership, which a founder should know: in this case 13.1% of the company at conversion. Founders who understand that number can decide how much to raise this way and on what caps.
How to model your own rounds
Use the share counts from your ledger or cap table platform, not percentages, so the model matches the documents.
Amount and post-money cap for each. If a SAFE has only a discount or another feature, convert it separately.
Set the raise from the burn and the months of runway you need, then test valuations either side of your target.
Enter the pool you need after each round, not a default percentage, and compare pre-money and post-money timing.
For each round, check the valuation growth needed to hold the stake’s value against what the new valuation gives.
Ownership must add to 100% at each stage. If it does not, an input is wrong.
Exit proceeds, and what dilution doesn't show
Ownership percentage is not the same as proceeds. The calculator multiplies the founders’ share by an exit value: at $300 million, 44.83% is $134.5 million. That is an upper bound. It treats every share as common stock and the whole pool as issued and exercised, and it ignores the terms that decide who is paid first.
Preferred investors usually hold a liquidation preference, most often 1x, that returns their money before common holders receive anything, and some preferences participate and take a share of the remainder too. At a $300 million sale the preferences in this example, about $16.8 million of invested capital, are small next to the price, and the as-converted percentages are close to the truth. In a sale for $30 million the $12 million Series B preference alone is 40% of the price, and founders receive far less than 44.83% suggests. The lower the exit relative to the money raised, the more the preference terms matter and the less the ownership table tells you.
Unissued pool shares also do not receive proceeds at an exit. If part of the pool is still unallocated, its value is shared among the other holders, which raises everyone’s actual take slightly above the fully diluted figure.
Common mistakes
They are committed dilution. Include them in the model as soon as they are signed.
Say which one you mean, and compound relative dilution across rounds.
The pool is diluted by each round and refreshed. Leaving it out understates the cost.
The founders lose more when SAFEs convert and the pool grows in the same stage.
Investors quote ownership on a fully diluted basis, so the model should too.
Dilution is only bad news if the company is not worth enough more after the round.
It ignores preferences, so it is an upper bound.
Published founder-ownership figures rest on different samples. Work from your own terms.
What this calculator can't tell you
It models post-money SAFEs with a valuation cap and up to three priced rounds, with the pool created before or after each investment. It does not model discount-only or pre-money SAFEs, MFN clauses, convertible notes, liquidation preferences, participation, anti-dilution provisions, secondary sales, vesting or cancellations. Any of those can change the real cap table.
The SAFE conversion follows the standard post-money form, in which the capitalization excludes the priced round’s new money and its pool increase. A modified SAFE or a side letter can change that. The exit figure ignores preferences and treats the pool as fully issued.
This is a planning aid, not legal or investment advice. A lawyer or a cap table platform should confirm the actual share counts before anything is signed.
Sources
The mechanics follow standard venture financing practice and the Y Combinator post-money SAFE, in which each holder’s ownership is the purchase amount divided by the valuation cap of the company capitalization. The examples were computed with the same engine as the calculator and checked by hand: the SAFE conversion gives a capitalization of 10,359,712 shares, and ownership adds to 100% at every stage. The workbook reproduces the same results with formulas.
Frequently asked questions
Dilution is the drop in a shareholder’s percentage ownership when a company issues new shares. The holder keeps the same number of shares, but they become a smaller part of a larger total. New shares come from investors in a round, from SAFEs and notes that convert, and from the employee option pool. A founder who owns 57.2% before a round and 44.8% after it has been diluted, although the value of that stake can still rise if the company is worth more.
Relative dilution = 1 − (new ownership ÷ old ownership). Going from 57.22% to 44.83% is 1 − 0.4483 ÷ 0.5722 = 21.7% relative dilution, a change of 12.4 percentage points. For a simple round with no pool, dilution equals the investor’s share: a $4 million investment at a $15 million pre-money valuation takes 4 ÷ 19 = 21.1%, and every existing holder’s stake shrinks by that fraction.
It varies with the company, the stage and the market, and published ranges are anecdotal and depend on the sample. Rather than aim for a typical figure, work backward from the ownership you want when the company is sold or listed: with three rounds that each take 20% of the company, founders keep 0.8 × 0.8 × 0.8 = 51.2% of what they started with, before any option pool top-ups. The calculator lets you test your own round sizes and valuations.
A post-money SAFE converts into shares at the next priced round, and its holder ends up owning the purchase amount divided by the valuation cap, measured on the company’s capitalization before the round’s new money. A $500,000 SAFE at a $5 million cap is 10.0% of that capitalization. Founders are diluted at the moment of conversion, and everyone, including the SAFE holders, is then diluted by the round’s new shares and any pool increase.
It is the current Y Combinator standard SAFE. Its valuation cap is a post-money cap: it includes the SAFE money itself and all other SAFEs. Each holder’s percentage is therefore fixed as their purchase amount divided by the cap, which makes the dilution easy to predict. A pre-money SAFE measures the cap before other SAFEs convert, so later SAFEs dilute earlier ones and the outcome is harder to estimate.
When the pool is created inside the pre-money valuation, only the existing holders are diluted by it, because the shares exist before the price per share is set. In the example, the 12% pool at the first priced round and the 10% at the second cost the founders about three points of ownership by the end, compared with smaller pools of 8% and 6%. A pool created after the investment dilutes everyone, including the new investor, and costs the founders less.
It counts every share that could exist: issued shares, granted and reserved options, and convertible securities as if they had converted. Investors price rounds and quote ownership on a fully diluted basis, which is why an option pool that has not been granted still reduces everyone’s percentage. A cap table that lists only issued shares understates dilution.
Divide 1 by 1 minus the dilution. If a round dilutes your stake by 20%, the company’s valuation must rise by a factor of 1 ÷ 0.8 = 1.25 for the stake to be worth the same. For 30% dilution the factor is 1.43, and for 40% it is 1.67. In the example, the second round dilutes the founders by 21.65% and needs a 1.28-times step-up, while the implied valuation rises 3.0 times, so the stake is worth 2.35 times as much.
Not by itself. A dilutive round also brings in cash and, if the price per share is higher than before, raises the value of every share. Your ownership percentage falls, but the value of your stake is that percentage times the company’s value. Dilution destroys value only when new shares are sold at a price below the value of the existing ones, as in a down round.
Multiply the retention per round. If each round dilutes the founders’ stake by 20%, they keep 80%, 64%, 51.2% and 41.0% of their starting stake after one to four rounds. If each takes 25%, they keep 75%, 56.3%, 42.2% and 31.6%. Add option pool top-ups and SAFE conversions to those figures and the retention is lower. The calculator computes the exact path from your terms.
They convert at the cap and become shareholders, so their percentage is set at conversion: 10.0% for the $500,000 SAFE at a $5 million cap in the example. They are then diluted along with everyone else by the new investors’ shares and by any option pool increase. After the first round in the example that 10.0% is 7.4%, and after the second it is 5.8%.
It leaves out liquidation preferences, participation rights, anti-dilution provisions, discount-only and pre-money SAFEs, MFN clauses, convertible notes, secondary sales and vesting. Those terms change who receives what at an exit, and in a modest sale they can matter as much as ownership. The founders’ exit figure multiplies their percentage by the exit value and ignores preferences, so it is an upper bound.
For one round in detail, use the pre and post-money valuation calculator, or divide the founders’ stake with the founder equity split calculator.
Glossary:Dilution,Cap Table,Option Pool,SAFE
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