Cap Table Dilution Calculator: See Your Ownership After a Raise

Last updated: August 5, 2026 · Reviewed by the DoCalc team

What Is a Cap Table Dilution Calculator?

Every time a startup raises a priced round, new shares are issued to the investor — which means everyone else's percentage ownership goes down, even though they didn't sell anything. This calculator shows exactly how much: the price per share, how many new shares get created, and what existing shareholders' ownership looks like after the round closes.

The Formula

Price per Share = Pre-Money Valuation ÷ Current Shares Outstanding New Shares Issued = Investment Amount ÷ Price per Share New Investor Ownership % = Investment Amount ÷ Post-Money Valuation Post-Money Valuation = Pre-Money Valuation + Investment Amount

Worked Example

A company with 8,000,000 shares outstanding, raising $2,000,000 at an $8,000,000 pre-money valuation:

Price per share = $8,000,000 ÷ 8,000,000 = $1.00 Post-money valuation = $8,000,000 + $2,000,000 = $10,000,000 New shares issued = $2,000,000 ÷ $1.00 = 2,000,000 New investor ownership = $2,000,000 ÷ $10,000,000 = 20% Existing shareholders' ownership after the round = 80%

Every existing shareholder — founders, earlier investors, employees with vested equity — sees their percentage ownership reduced proportionally, even though the number of shares they hold doesn't change.

What This Doesn't Include

Factor	Included?	Note
New investor's share purchase	Yes	The core dilution calculated above.
Option pool top-up	No	Many term sheets require expanding the option pool pre-round, which dilutes further — check your specific term sheet.
Converting SAFEs/notes	No	Existing SAFEs or convertible notes typically convert into shares at the same round, adding more dilution — use the SAFE Note Conversion Calculator for that piece.

Pros and Cons of Raising at a Higher Valuation

Pros of a higher pre-money valuation: less dilution for the same amount raised, a stronger signal for future rounds, more room before hitting a "down round."

Cons of pushing valuation too high: makes the next round harder to price up further, can create investor expectations that are difficult to meet, and an inflated valuation now can mean a painful down round later if growth doesn't keep pace.

Who Should Use This Calculator

Use it if you're a founder evaluating a term sheet and want to see the concrete dilution math before negotiating, or an early employee trying to understand how a new round affects your equity.

For SAFE conversions specifically, use the dedicated SAFE Note Conversion Calculator, which handles valuation caps and discounts.

Common Mistakes to Avoid

The most common mistake is forgetting the option pool top-up, which many term sheets bake in pre-round and which typically dilutes existing shareholders more than the investor's own stake does. A second mistake is focusing only on percentage ownership without considering that a smaller slice of a much larger company can still be worth more in dollar terms. A third is not modeling multiple future rounds — dilution compounds across each subsequent raise.

Expert Recommendation

Before signing a term sheet, model the fully-diluted cap table including any option pool expansion — not just the headline investor percentage — since the pool top-up is often the larger, less-visible source of dilution in a priced round.

Frequently Asked Questions

What's the difference between pre-money and post-money valuation?

Pre-money valuation is what the company is worth before the new investment is added. Post-money valuation is pre-money plus the new money raised. Price per share is calculated from pre-money valuation divided by shares outstanding before the round.

Does this include an option pool top-up?

No — this calculator shows straightforward dilution from new investor shares only. Many priced rounds also require expanding the employee option pool before the round closes, which dilutes existing shareholders further (often more than the new investor's own stake) — factor that in separately if your term sheet includes one.

Why does raising more money dilute me more?

At a fixed pre-money valuation, a larger raise means the new investor's money buys a bigger slice of the post-money company, since post-money = pre-money + raise, and the investor's ownership % is raise ÷ post-money. Raising more at the same valuation always means giving up more ownership.

How can I reduce dilution?

The two main levers are raising less money and negotiating a higher pre-money valuation — both directly reduce the investor's ownership percentage for the same dollar amount raised. Efficient capital use (raising only what's needed) is the most direct way to control dilution over a company's lifetime.

Does dilution mean my shares are worth less?

Not necessarily — your ownership percentage goes down, but if the round meaningfully increases the company's total value, your smaller percentage of a bigger pie can still be worth more in dollar terms than your larger percentage of the smaller pie was before. Dilution and value destruction are not the same thing.

Conclusion

Dilution is a mechanical consequence of raising priced equity rounds — not inherently good or bad, just a real cost that founders and early shareholders should see clearly before signing a term sheet. Run your own numbers above, and remember to check for an option pool top-up on top of what's shown here.

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