How much of your company do you give up when you raise money? The answer depends on the valuation, the check size, and any shares set aside for employees. The Startup Equity Calculator turns those three numbers into ownership percentages.
Enter the post-money valuation, the amount raised, and the option pool percent. The tool shows the investor stake, the pre-money valuation, and the equity left for the founders. It suits founders, early employees, and angel investors.
Table of Contents
- What the Calculator Does
- How to Use It, Step by Step
- The Equity Formulas
- Worked Example
- How to Read the Results
- Pre-Money, Post-Money, and the Option Pool
- Limitations and Assumptions
- FAQs About the Startup Equity Calculator
What the Calculator Does
The tool updates live as you type and uses whole dollars.
- Investor Shareholding Ownership: the investor's percent, shown as Investor Equity.
- Implied Pre-Money Valuation: the company's value before the new money.
- Founders and Other Holders Equity: what is left after the investor and the option pool.
- Option Pool Reserved Value: the dollar value of the pool, with its percent.
- Valuation Cost Per 1% Equity: the price of one percentage point of the company.
- Copy Cap Table Breakdown and Reset buttons.
How to Use It, Step by Step
- Enter the company value after the round in Post-Money Valuation ($).
- Enter the new money in Investment Amount Raised ($).
- Enter the share of the company held back for hires in Unissued Option Pool Reserved (%).
- Read the investor stake first, then the founder share.
- Press Copy Cap Table Breakdown to copy a summary, or Reset to restore the sample round.
Use post-money, not pre-money, in the first box. The tool backs out the pre-money value for you.
Post-money must be at least $100,000, and the pool can be 0 to 50 percent. A blank box shows a red message instead of results.
The Equity Formulas
The investor's stake is simply their check divided by the post-money value.
Investment÷Post-Money Valuation×100=Investor Equity %
- Pre-money valuation = post-money valuation - investment.
- Founders and other holders equity = 100 - investor percent - option pool percent, using the rounded figures shown.
- Option pool value = post-money valuation × (pool percent ÷ 100).
- Cost per 1% = post-money valuation ÷ 100.
Worked Example
Priya founded a software company. An investor will put in $2,000,000 at an $8,000,000 post-money valuation. Her lawyer wants a 12 percent option pool.
| Result | Calculation | Output |
|---|
| Investor Equity | $2,000,000 ÷ $8,000,000 × 100 | 25.0% Investor Equity |
| Implied Pre-Money | $8,000,000 - $2,000,000 | $6,000,000 |
| Founders and Other Holders Equity | 100 - 25 - 12 | 63.0% Ownership |
| Option Pool Value | $8,000,000 × 12% | $960,000 (12.0%) |
| Cost Per 1% Equity | $8,000,000 ÷ 100 | $80,000 / 1% |
After the round, Priya and any co-founders share 63 percent. The rest belongs to the investor and the future hires.
How to Read the Results
Investor Equity is the slice the new money buys. A bigger check or a lower valuation raises it.
Founders and Other Holders Equity treats everyone outside the investor and the pool as founders. If earlier investors or advisors hold shares, split this figure among them.
Option Pool Reserved Value shows what the pool is worth at the round price. Cost Per 1% shows how steep the price is, since each point costs the same amount.
Pre-Money, Post-Money, and the Option Pool
Pre-money is the value before the new cash arrives. Post-money is that value plus the cash. A $6,000,000 pre-money company that raises $2,000,000 is worth $8,000,000 after.
Pool size is a common negotiation point. Investors often want the pool created before their money comes in, which trims founder shares. This tool simply subtracts the pool from what is left, so it does not model that effect.
To judge whether a valuation is reasonable, try the business valuation calculator. Check how long the new cash lasts with the runway calculator and the burn rate calculator. Investors can test their return with the ROI calculator. Founders can also plan spending with the break-even point calculator. More tools are in the finance and business calculator hub.
Limitations and Assumptions
- The tool models one round. It does not handle several rounds, SAFEs, convertible notes, or earlier investors.
- It does not model liquidation preferences, vesting, or anti-dilution terms.
- The pool is subtracted from the founders' share. It is not added to the pre-money valuation.
- Post-money must be at least $100,000. An investment above post-money, or a pool above 50 percent, shows a message and no results.
- Investor equity plus the pool cannot pass 100 percent. Blank or negative fields also show a message.
- The three percentages are rounded to 0.1 and add to 100.0 percent. Any tiny rounding gap lands in the founders line.
- Cost per 1% is only post-money divided by 100, not a per-share price. Results are estimates, not legal or tax advice.
FAQs About the Startup Equity Calculator
What is post-money valuation?
Post-money valuation is a company's value right after a funding round. It equals the pre-money value plus the new cash. The investor's percent is their check divided by this number.
How is pre-money valuation calculated?
Subtract the investment from the post-money valuation. If a company is worth $8,000,000 after raising $2,000,000, its pre-money value was $6,000,000.
What is an option pool?
An option pool is a block of shares reserved for future hires and advisors. It stays unissued until you grant options, so it dilutes the founders now.
Why does the founder percentage look low?
The tool subtracts both the investor stake and the option pool from 100 percent. A large pool or a big check can leave the founders with much less.
Does this tool handle SAFEs or convertible notes?
No. It models a priced round with one investor. Notes and SAFEs convert later, and their math depends on caps and discounts.
How much equity do founders usually give up?
Early rounds often involve selling a minority share, but terms vary widely by company and market. Enter your own numbers to see the exact split.
This calculator gives planning estimates only and is not financial advice. Reviewed for general accuracy by Prof. Dr. Khalil Mudassar, PhD.