Step-by-step walkthrough
Use this companion guide beside the interactive calculator to make sure you understand the “why” behind every click. Each section includes the classroom explanation, student-friendly language, and quick practice prompts.
Collect the data points listed below and double-check their units. Keeping an organized “givens” list is one of the fastest ways to reduce math errors and impress exam graders.
Step 1
Enter your current ownership percentage before the round.
Step 2
Enter the round's pre-money valuation and how much capital is being raised.
Step 3
Add any new option pool percentage being created as part of the round — pools are usually carved out of existing shareholders, not just new investors.
Investors typically require the option pool to be created before their money comes in, which means existing shareholders — not the new investor — absorb most of the pool's dilution. This is a common negotiating point in term sheets.
Not necessarily — a smaller percentage of a much larger company can be worth more than a larger percentage of a small one, provided the new capital is used to genuinely grow the company's value.
