Special Offer: Get The Private Investing Playbook: From Angel to Venture Capital for $49.99 $4.99!Get the e-book
Funding-round model
Estimate how a new primary funding round changes investor ownership percentages.
Post-round ownership = existing ownership × (pre-money valuation ÷ post-money valuation).
The model adds the new investment to the pre-money valuation. The new investor's percentage is investment divided by post-money valuation. Existing ownership is multiplied by the pre-money share of post-money value.
For example, a $20 million investment at an $80 million pre-money valuation produces a $100 million post-money valuation and 20% ownership for the new money.
Common questions
Dilution is the reduction in an existing shareholder's percentage ownership when a company issues additional shares.
In this simplified model, post-money valuation equals pre-money valuation plus the new primary investment.
Usually yes. If the option pool is expanded before or during the round, existing holders may be diluted beyond the simplified result shown here.