Dilution calculator
Dilution is the fall in an existing shareholder's percentage when new shares are issued. You keep the same shares, but they are a smaller slice.
The formula
Dilution = existing shares ÷ all shares after the round
Worked example: 70.0% kept by existing shareholders, down from 100.0%
The example uses the guide's seed round, £200,000 for 20%, with a matching cap table, exit, fund and market.
- 1,000,000 existing shares ÷ 1,428,571 shares after the round = 70.0%
- Down 30.0 percentage points
Work out your dilution
Until you type a figure, the results show an example business. Fill in only what you know: from then on every result uses your figures alone, and nothing you type leaves your browser.
Dilution for the example
Example70.0%
kept by existing shareholders, down from 100.0%
- 1,000,000 existing shares ÷ 1,428,571 shares after the round = 70.0%
- Down 30.0 percentage points
Formula: Existing shares ÷ all shares after the round.
- Diluted by
- 30.0 points
- Price per share
- £0.70
Everything your numbers show
For the example business: 27 of 27. Type your own figures to replace them. Select one for its page.
- Valuation£1,000,000post-money
- Pre-money valuation£800,000
- Post-money valuation£1,000,000
- Equity20.0%Equity sold
- Dilution70.0%kept by existing shareholders, down from 100.0%
- Option pool142,857new pool shares
- Fully diluted60.0%Fully diluted ownership
- SAFESimple agreement for future equity89,286shares
- Loan note96,429shares
- Pro rata rights£200,000Pro rata amount
- Liquidation preference£1,000,000to the investor
- Vesting180,000after 18 months
- Cliff120,000at month 12
- SEISSeed Enterprise Investment Scheme£10,000
- EISEnterprise Investment Scheme£6,000
- VCTVenture capital trust£4,000
- TAMTotal addressable market£240,000,000a year
- SAMServiceable available market£60,000,000a year
- SOMServiceable obtainable market£3,000,000a year
- Down roundDown round
- Up roundDown round
- Flat roundDown round
- MOICMultiple on invested capital2.80x
- IRRInternal rate of return22.9%a year
- TVPITotal value to paid-in capital1.50x
- DPIDistributions to paid-in capital0.40x
- Dry powder£24,000,000
How to read your result
Being diluted is fine if the company is worth more after the round. What matters is the value of your slice, not only its size.
Watch out for
An option pool top-up inside the pre-money often dilutes founders more than the investor does.
Last checked . Estimates only, not financial, tax or legal advice: check your accounts and documents, and take advice before you act. More terms in the startup glossary.