Equity Dilution Calculator
See exactly how much equity you give up across funding rounds. Enter your valuation and round details to calculate founder dilution — then compare with non-dilutive alternatives.
How It Works
1
Enter Your Funding Details
Input your pre-money valuation, round size, option pool percentage, and number of funding rounds to simulate.
2
See How Your Ownership Changes
The calculator computes your founder ownership percentage after each round, accounting for investor dilution and option pool expansion.
3
Compare Equity vs. Non-Dilutive Funding
Instantly see how much equity you give up versus keeping 100% ownership with revenue-based financing.
Funding Parameters
Adjust these values to model your equity dilution
Pre-money Valuation ($)
Round Size ($)
Option Pool (%)
Key Results
Your equity dilution summary
Your Ownership After 3 Rounds
54.0%$3,000,000
46%
With non-dilutive funding, you'd keep 100% ownership
Revenue-based financing lets you raise $3,000,000 without giving up any equity.Ownership Across Funding Rounds
How each round dilutes your equity stake
Equity vs. Non-Dilutive Funding
Compare your ownership under each scenario
After 3 Equity Rounds
$3,000,000 raisedWith Founderpath RBF
Same capital, zero dilutionYou keep 46.0 more percentage points of your company with non-dilutive funding
Understanding Equity Dilution
How funding rounds reduce founder ownership — and what you can do about it
Equity dilution occurs every time a company issues new shares to investors. For SaaS founders, each funding round hands a percentage of ownership to investors, permanently reducing the founder's stake. Over three or four rounds, founders routinely go from 100% ownership to owning less than 30% of the company they built. Understanding how dilution works is the first step toward making smarter financing decisions.
What Is Equity Dilution?
Equity dilution happens when a company issues new shares, reducing the ownership percentage of existing shareholders. When investors put money into your company, they receive newly created shares in return. Even though the total number of your shares stays the same, you now own a smaller slice of a larger pie.
The core formula for calculating dilution after a funding round is:
New Ownership % = Old Ownership % x (Pre-money Valuation / Post-money Valuation)
Example: If your pre-money valuation is $5M and you raise a $1M round, the post-money valuation is $6M. A founder who owned 100% now owns 100% x ($5M / $6M) = 83.3%. That 16.7% went to investors.
How Dilution Compounds Across Funding Rounds
Dilution doesn't just happen once — it compounds with every round. Each new round dilutes everyone who came before, including the founder and all previous investors. Here's how it plays out using the calculator's default scenario:
Series A
Starting at 100% ownership with a $5M pre-money valuation, you carve out a 10% option pool (reducing to 90%) and raise $1M. Post-money is $6M, so your 90% gets multiplied by 5/6. Result: ~75% founder ownership.
Series B
Valuation doubles to $12M pre-money. Another 10% option pool carve-out from your remaining stake, then another round of investor dilution. After two rounds, founder ownership drops to around 62%.
Series C
By the third round, the compounding effect is clear. Even with a growing valuation, each round chips away at your ownership. After three rounds with the default settings, a founder who started at 100% retains around 54% of their company — and that's with a 2x valuation increase between rounds.
The option pool makes it worse. Investors typically require founders to expand the option pool before each round — known as the "pre-money option pool shuffle." This pool is carved from the founder's shares, not the investors', amplifying dilution beyond what the headline round terms suggest.
Average Dilution Per Funding Round
Industry benchmarks give founders a reference point for what to expect at each stage:
Seed round: 15–25% dilution. Typical round sizes of $500K–$3M at pre-money valuations of $3M–$10M.
Series A: 20–30% dilution. Larger rounds ($5M–$15M) but higher valuations ($15M–$50M). Investors expect proven product-market fit.
Series B: 15–25% dilution. Valuations grow faster than round sizes at this stage, moderating dilution somewhat.
These figures include both the investor's equity share and option pool expansion. After three rounds, a founder who started at 100% commonly retains 25–45% ownership, depending on valuation growth and negotiating leverage.
How to Minimize Equity Dilution
Dilution is not inevitable at every stage. Founders who plan ahead can retain significantly more ownership:
Raise Less Capital
Every dollar raised comes with an equity cost. Optimize your unit economics and extend your runway through efficient operations before raising. Only raise what you need to hit specific milestones that will materially increase your valuation.
Negotiate a Higher Valuation
A higher pre-money valuation means less dilution for the same amount raised. Build leverage through strong metrics, competitive term sheets, and demonstrated traction before entering negotiations.
Use Non-Dilutive Financing
Revenue-based financing, venture debt, and government grants provide capital without any equity cost. For SaaS companies with predictable recurring revenue, revenue-based financing can fund growth while keeping ownership at 100%.
Manage Your Option Pool
Investors often push for large option pools (15–20%) carved from the founder's pre-money stake. Only allocate what you need for the next 12–18 months of hiring. Refresh the pool in future rounds when valuations are higher.
When Is Dilution Worth It?
Dilution is acceptable when the capital deployed creates more enterprise value than the equity given away. A Series A that funds product-market fit acceleration can be transformative — 70% of a $100M company is worth far more than 100% of a $5M one.
Dilution becomes problematic when capital is used for runway extension, operational costs that don't compound, or when founders raise at depressed valuations under pressure. The key question is whether each dollar of equity sold generates a multiple in enterprise value.
Non-Dilutive Funding as an Alternative
Revenue-based financing (RBF) gives SaaS founders an alternative to equity rounds. Instead of selling shares, you receive capital in exchange for a percentage of monthly revenue until a fixed repayment cap is reached. Founders retain 100% equity, maintain full control, and avoid cap table complexity.
Founderpath provides revenue-based financing for SaaS companies with $15K+ MRR. You connect your billing platform, receive a funding offer based on your recurring revenue metrics, and deploy capital for growth — all without giving up a single share.
Keep 100% of Your Equity
Founderpath funds SaaS companies without taking equity.
Instead of giving away ownership, Founderpath provides revenue-based financing repaid from your monthly revenue. No board seats, no dilution, no warrants.
Founderpath advances capital against your recurring revenue. You keep 100% of your company — no investors, no board seats, no cap table complexity.
Connect your billing platform and receive a funding offer in 24 hours. No pitch decks, no partner meetings, no lengthy due diligence.
Repayments scale with your MRR. In slower months you pay less. In strong months you pay down faster. No fixed monthly payments putting pressure on cash flow.
Sales hiring, product development, paid acquisition, inventory — Founderpath places no restrictions on how you deploy the capital.
Founderpath underwrites based on MRR, churn, and growth rate — the metrics that actually predict SaaS performance — not EBITDA or collateral.
Frequently Asked Questions
Use our calculator above to see exactly how much dilution to expect across multiple funding rounds.
- Seed round: 15–25% dilution
- Series A: 20–30% dilution
- Series B: 15–25% dilution
New Ownership % = Old Ownership % x (Pre-money Valuation / Post-money Valuation)
For example: if your pre-money valuation is $5M and you raise $1M, the post-money valuation is $6M. A founder who owned 100% now owns 100% x (5M / 6M) = 83.3%.
Use our free dilution calculator above to model multiple rounds with compounding effects and option pool carve-outs.
Founderpath offers this model for SaaS companies with $15K+ MRR. Other non-dilutive options include venture debt, government grants, and customer prepayments.
Anti-dilution protections can significantly shift economics to investors at the expense of founders in a down round scenario. Understanding these clauses is essential when negotiating term sheets.
© 2026 Founderpath, Inc. All Rights Reserved.
