Your AI Copilot for Small Business Growth

Transform your small business with intelligent automation and AI-driven insights.

AskSMB.io helps small and medium businesses accelerate growth through:

• AI-powered business insights and recommendations

• Automated workflow optimization

• Personalized growth strategies

• Real-time business intelligence

• Integration with your existing tools

Get started today and join thousands of SMBs using AI to scale their operations.

JavaScript Required: For the full interactive experience, please enable JavaScript in your browser.

Equity Dilution Calculator – Calculate Founder Dilution - Free Business Calculator | ASK SMB
financial

Equity Dilution Calculator – Calculate Founder Dilution

Free equity dilution calculator. Calculate how fundraising impacts your ownership, share price, pre-money and post-money valuation instantly.

Equity Dilution Calculator

Calculate how much equity you'll give up in a fundraising round and understand the impact on your ownership.

Inputs

£

The total amount of funding you're raising in this round

%

The percentage of the company investors will own after the investment

The total number of shares that exist before the new investment

Results

Equity Dilution

10.00%

Low dilution - healthy equity preservation

Your Ownership After Dilution

90.00%

Your ownership percentage after the investment

Pre-money Valuation

£900,000.00

Company valuation before the investment

Post-money Valuation

£1,000,000.00

Company valuation after the investment (pre-money + investment)

Implied Share Price

£900.00

The price per share based on the pre-money valuation

New Shares to Issue

111

Number of new shares to be issued to investors

Percentage of Pre-money Valuation Raised

11.11%

Investment amount as a percentage of pre-money valuation

Ownership Breakdown After Investment

Valuation Breakdown

Share Count: Before vs After

Understanding Equity Dilution

Key Concepts

Pre-money Valuation

The valuation of your company before new investment. This is calculated by determining what valuation would result in the investor owning their desired percentage after investing their capital.

Pre-money = (Investment ÷ Post-money %) - Investment

Post-money Valuation

The valuation of your company after the new investment. This is simply the pre-money valuation plus the investment amount.

Post-money = Pre-money + Investment

Share Price

The implied price per share is calculated by dividing the pre-money valuation by the number of existing shares.

Share Price = Pre-money Valuation ÷ Existing Shares

Dilution Impact

Your dilution percentage equals the percentage of new shares being issued. While your percentage decreases, the total value of your stake may increase if the valuation is fair.

Example Calculation

Let's say you're raising £100,000 for 10% post-money equity, and you currently have 1,000 shares:

  • Pre-money valuation: £900,000
  • Post-money valuation: £1,000,000
  • Implied share price: £900
  • New shares to issue: 111 shares
  • Your dilution: 10%
  • Your new ownership: 90%

Equity dilution occurs when a company issues new shares, reducing the ownership percentage of existing shareholders. While dilution decreases your percentage ownership, it doesn't necessarily decrease the value of your stake if the investment increases the company's overall valuation.

Tips & Best Practices

  • Aim for 15-20% dilution per round - This is typical for early-stage funding
  • Consider the valuation - A higher valuation means less dilution for the same investment
  • Plan for future rounds - Most startups raise multiple rounds; ensure you maintain meaningful ownership
  • Reserve option pool - Consider allocating 10-15% for employee stock options before the investment
  • Negotiate terms - Don't just focus on valuation; other terms (liquidation preference, anti-dilution) matter too

Frequently Asked Questions

Equity dilution is the reduction in ownership percentage that occurs when a company issues new shares. When new shares are created and sold to investors, the total number of shares increases, which decreases the percentage ownership of existing shareholders. However, if the investment is at a fair valuation, the actual value of your stake may increase even though your percentage decreases.

💡 Quick Tips

  • All calculations happen in your browser - your data is private
  • Results update in real-time as you type
  • Export to PDF or share via link
  • No sign-up required

Need More?

Get personalized advice from real SMB experts