The Founder Dilution Calculator computes the exact percentage of equity given away to venture capital investors in an equity financing round, along with the founder’s remaining ownership stake and implied wealth creation.
Mathematical Formula
Dilution (%) = (Investment Amount / Post-Money Valuation) * 100
Founder Retained (%) = Prior Stake * (1 - Dilution)
Typical Round Dilution Targets
- Pre-Seed / Seed: 10% to 20% dilution.
- Series A: 15% to 25% dilution.
- Series B: 10% to 15% dilution.
Frequently Asked Questions (FAQ)
How much equity should founders own at Series A?
Top VC standards look for the founding team to retain at least 60% to 75% combined equity after the Series A round to maintain alignment.
Why is dilution a trade-off for growth?
A smaller percentage of a massively larger company (60% of $50M = $30M) is vastly superior to owning 100% of a stagnant $500k business.