Founder Equity Dilution Simulator
Visualize cap table changes and founder dilution across Seed and Series A funding rounds.
Option pool created in the Seed round to hire early employees.
What is the Founder Equity Dilution Simulator?
The Founder Equity Dilution Simulator is a cap table planning engine built for startup founders preparing to raise capital. It models how investment sizing, pre-money valuations, and newly created employee option pools dilute your original founder equity stake across consecutive fundraising rounds (Seed and Series A).
How Does the Founder Equity Dilution Simulator Work?
1. Enter Initial Equity â Original founder equity percentage (typically 100% at launch).
2. Define Seed Round â Input Seed investment cash, Pre-money valuation, and Option pool percentage.
3. Define Series A Round â Input Series A cash size and Pre-money valuation.
4. Analyze Dilution â Review post-money valuations, investor shares, and your final founder equity stakes.
Formula & Calculation Method
Fundraising Dilution Equations:
- Seed Round:
- Post-Money Valuation = Pre-Money Valuation + Investment Cash
- Investor Share = (Investment Cash / Post-Money Valuation) Ã 100%
- Founder Post-Seed Equity = Initial Founder Equity à (100% - Investor Share - Option Pool %) / 100
- Series A Round:
- Everyone on the cap table is diluted proportionally by the new Series A investor share:
- Founder Post-Series A = Founder Post-Seed à (100% - Series A Investor Share) / 100
Example Calculation
Example: Founders own 100% at startup. Raise $500,000 Seed at $3M Pre-Money (10% Option Pool). Then raise $2,000,000 Series A at $10M Pre-Money.
- Seed Round:
- Post-money = $3,500,000 | Investor share = 14.28%
- Founder share = 100% Ã (100 - 14.28 - 10) / 100 = 75.72%
- Series A Round:
- Post-money = $12,000,000 | Investor share = 16.67%
- Founder share = 75.72% Ã (100 - 16.67) / 100 = 63.1%
- Result: Founders own 63.1% post-Series A, while Seed investors dilutes to 11.9%.
Frequently Asked Questions
**Fundraising Dilution Equations:** - **Seed Round:** - Post-Money Valuation = Pre-Money Valuation + Investment Cash - Investor Share = (Investment Cash / Post-Money Valuation) à 100% - Founder Post-Seed Equity = Initial Founder Equity à (100% - Investor Share - Option Pool %) / 100 - **Series A Round:** - Everyone on the cap table is diluted proportionally by the new Series A investor share: - Founder Post-Series A = Founder Post-Seed à (100% - Series A Investor Share) / 100
Disclaimer: This tool is provided for informational and calculation purposes. Output values are estimates based on standard user inputs.