Equity Grant Dilution Calculator

What Is Equity Dilution?

Equity dilution is the reduction in ownership percentage that happens when a company issues new shares. Your share count stays the same, but the total share count grows, so your slice of the pie shrinks. A typical priced venture round dilutes existing shareholders by 15-25%, and multiple rounds compound — a Series A, B, and C together commonly halve founding-team ownership.

How the Calculation Works

Your pre-round ownership is your grant shares divided by total shares outstanding. After a round that sells X% to new investors, your ownership becomes pre-round % × (1 − X%). For example, 1% pre-round with 20% dilution becomes 0.8% post-round. The math is straightforward; the trick is stacking rounds to project all the way to exit.

Option Pool Refreshes

Venture rounds often include an option pool refresh — a top-up to the employee option pool, usually bringing it to 10-15% of post-money shares. The refresh is typically done pre-money, meaning existing shareholders (including you) get diluted more than the headline dilution suggests. Always ask whether the next round assumes a pool refresh and how large it will be.

Why Ownership Percentage Matters

Your dollar payout at exit is ownership percentage × company sale price, minus liquidation preferences paid to investors first. A $100M exit with 0.25% ownership and no preferences pays about $250K. The same $100M exit with $80M of 1x preferences only leaves $20M for common — and your 0.25% pays only $50K. Dilution and preferences together determine your real number.