Free tools / Equity dilution
Startup equity dilution calculator
What a priced round does to existing shareholders: the new shares issued, the price per share and who owns what afterwards.
Post-money valuation$6,000,000
Price per share$5.00
New shares issued200,000
Existing holders after83.3% from 100%
Investor owns16.7%
A priced round sets a price per share from the pre-money valuation and the shares that already exist. The investor's money buys new shares at that price. Everyone who held shares before still holds the same number; they simply own a smaller share of a larger company.
The investor's stake is the investment over the post-money valuation, which is pre-money plus investment. Existing holders are diluted by exactly that fraction. Option pools created before the round come out of the pre-money and dilute the founders alone; pools created after dilute everyone. Ask which one the term sheet means.