Irish Calculators
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Funding Round Equity Dilution Calculator

Calculate how a priced funding round and new option reserve change the ownership split. Match the inputs to the term sheet; employee vesting, option compensation and tax are not valued here.

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Your numbers

One row: holder label,fully diluted shares. Include existing options once; no headers.
%
This is an additional reserve, not a target total pool including options already in the input holdings.
Your figures stay on this device.

How the calculation works

Model ownership after a priced equity investment using a fully diluted share count. An optional additional option reserve is created before the investment but expressed as a percentage of ownership after the round.

Investor fraction = investment / (pre-money value + investment). New reserve shares = requested post-round reserve fraction × existing shares / (1 − investor fraction − reserve fraction). Share price = pre-money value / (existing shares + new reserve shares).

  1. Establish the initial capitalisation

    Sum the existing fully diluted holdings. The calculation keeps each holder's share count and compares their initial and resulting ownership percentages.

  2. Price the round and reserve

    Investor ownership is investment divided by pre-money value plus investment. Where requested, solve for the new reserve that reaches its post-round percentage while being included in pre-money shares.

  3. Allocate post-round ownership

    Divide pre-money value by the expanded pre-money share count to obtain subscription price. Calculate investor shares, then divide all holdings by the total after issuance.

Worked example: Round without pool

Sample inputs demonstrate the method. They are not a forecast or product offer.

The first example has one million existing shares and €4 million pre-money value, giving €4 per new share. A €1 million investment buys 250,000 shares. Out of 1.25 million shares, the investor owns 20% and existing holders collectively retain 80%.

Existing fully diluted holdings
A,600000 B,400000
Pre-money equity valuation
4000000
New cash investment
1000000
New option reserve as post-round ownership (%)
0

Expected result

Price per new share
€4.00
New investor ownership
20%
Existing holders after round
80%
Worked example: Round with reserve

Sample inputs demonstrate the method. They are not a forecast or product offer.

Existing fully diluted holdings
A,1000000
Pre-money equity valuation
4000000
New cash investment
1000000
New option reserve as post-round ownership (%)
10

Expected result

New investor ownership
20%
Existing holders after round
70%
New reserve shares
142,857.142857

Understanding your result

Existing holders bear the additional reserve dilution under this convention. The new investor retains the share implied by investment divided by post-money valuation, so changing reserve size changes the pre-round holders' outcome.

Fractional shares are mathematical outputs, not instructions for legal issuance. The model excludes convertible instruments, liquidation preferences, anti-dilution rights and other terms that can change an actual capitalisation table.

Questions you might have

Does the option reserve dilute the new investor?

Under this model it is included in the pre-money capitalisation. The investor retains investment divided by post-money valuation; existing holders bear the new reserve dilution.

Choosing the right inputs

Existing fully diluted holdings
Enter each holder and fully diluted shares once. Existing options belong in the starting holdings if they form part of that basis; do not add them again as a new reserve.
Pre-money equity valuation
Use the agreed pre-money equity valuation, not enterprise value or a post-money amount. The share-price calculation depends on this definition.
New option reserve as post-round ownership
This is a new additional reserve measured as post-round ownership, not a target total option pool including options already counted in existing holdings.

Common mistakes to avoid

  • Do not treat a requested new reserve as the desired total of both existing and new options.
  • Do not use a pre-money valuation with a share count based on different term-sheet assumptions.

Assumptions to check

  • Use amounts in one currency and one reporting period. Results are labelled EUR; the arithmetic also works for another consistent currency.
  • The pre-money valuation and option-pool treatment must match the proposed term sheet. Existing holdings must be consistently fully diluted.

Sources and method

Read our calculation and testing approach.