§ 01
Post-Money = Pre-Money + Investment | Ownership = Investment / Post-Money
§ 02
| Round | Pre-Money | Investment | Post-Money | New Investor Owns |
|---|---|---|---|---|
| Seed | $5M | $1M | $6M | 16.7% |
| Series A | $20M | $5M | $25M | 20% |
| Series B | $80M | $20M | $100M | 20% |
| Series C | $300M | $50M | $350M | 14.3% |
§ 03
Each round dilutes previous shareholders. A founder who starts with 100% might own 40–50% after Series A, 25–35% after Series B, and 15–25% by IPO. This dilution is the cost of growth capital.
§ 04
Look at a recently-IPO’d company’s S-1 filing. Check the founders’ ownership percentage — it reveals how much dilution occurred through all funding rounds.
§ 05
A founder owns 60% after the seed round. Series A dilutes everyone by 20%. What does the founder own now?
§ 06
§ 07
A startup raises $5M at $20M post-money valuation. What's the pre-money valuation, and what percentage do new investors own?
Five questions · AI feedback
Sit with the ideas.
A startup has a $40M pre-money valuation. It creates a 10% option pool (from pre-money shares) and then raises $10M. What is the effective pre-money valuation for existing shareholders?
Why: