To use this calculator, input the investment amount, pre-money valuation, and any other relevant details such as equity offered and option pool size. The calculator will provide you with the post-money valuation and ownership percentages.
The post-money valuation is calculated by adding the pre-money valuation to the investment amount. Investor ownership is determined by dividing the investment amount by the post-money valuation and multiplying by 100. Option pool ownership is calculated based on the specified option pool size. Founder ownership is the remaining percentage after accounting for investor and option pool ownership.
Suppose a startup has a pre-money valuation of $100,000 and receives an investment of $10,000. If the equity offered is 10% and the option pool size is 5%, the post-money valuation would be $110,000. The investor would own approximately 9.09% of the company, the option pool would account for 5%, and the founders would retain 85.91% ownership.
When planning for equity dilution, consider the long-term impact on founder ownership and control. It's crucial to balance attracting investors with maintaining sufficient equity for future growth and employee incentives. For more detailed financial planning, consider using our Investment Calculator or ROI Calculator.