Module 4
Dilution Simulator
The founder starts owning 100%. Every round trades a slice of the pie for capital to grow it. Toggle rounds on or off and watch the cap table shift.
Post-money valuation at Series C: $50.0M
What the Founder Kept
After 3 rounds, the founder's stake dropped from 100% to 47.0%. Even so, a shrinking slice of a much bigger pie ($50.0M post-money) can be worth far more than 100% of a company that never raised.
Why This Matters
Every funding round dilutes existing shareholders — founders, employees, and earlier investors — to make room for new capital and new option pool grants.
Common Misconception
Founders think dilution means losing control or value. In reality, a smaller percentage of a much larger, better-capitalized company is usually the better trade.
Key Takeaway
Dilution isn't a loss — it's the cost of turning an idea into something big enough to matter.