Post-money valuation and share count changes
Post-money valuation equals pre-money valuation plus the amount invested. The investor's ownership percentage equals the amount they invest divided by the post-money valuation. Every other shareholder's percentage falls proportionally, since the total number of shares increases while their own share count stays the same.
| Item | Amount |
|---|---|
| Pre-money valuation | EUR 8,000,000 |
| New investment | EUR 2,000,000 |
| Post-money valuation | EUR 10,000,000 |
| New investor ownership | 20% |
| Dilution to existing shareholders | 20%, split proportionally among them |
Founder stake reduction from seed onward
Consider a founder who owns 90% at incorporation, with a 10% option pool already carved out. After a seed round that dilutes everyone by 20%, the founder owns approximately 72%. After a Series A that dilutes by 20% including a pool top-up, the founder owns approximately 57.6%. After a Series B diluting by 15%, the founder owns approximately 49%.
| Stage | Dilution this round | Approx. founder ownership after |
|---|---|---|
| Incorporation with pool | n/a | 90% |
| Seed | 20% | 72% |
| Series A | 20% | 57.6% |
| Series B | 15% | 49% |
Additional share reservations during funding rounds
Investors typically require the option pool to be refreshed to a target size, often 10% to 15%, as part of a new round. If this top-up happens pre-money, it dilutes existing shareholders before the new investor's percentage is calculated, effectively making the deal more favorable to the investor than the headline valuation suggests.
Founders should always ask whether a proposed option pool top-up is calculated pre-money or post-money, since this materially changes the effective price paid for the round.
Monitoring fully diluted stakes across stages
A cap table should be updated after every share issuance, whether from a funding round, option exercise, or new grant, so that founders and employees can see their fully diluted ownership at any point. Fully diluted means counting all outstanding options and unallocated pool shares as if they were already issued, giving a more conservative and realistic ownership picture.
Post-round ownership, worked through
- What is the difference between pre-money and post-money valuation?
- Pre-money is the company's agreed value before new investment; post-money is pre-money plus the new money raised in that round.
- Does dilution mean a founder's shares are worth less?
- Not necessarily. Ownership percentage falls, but if the company's valuation rises enough, the value of the founder's smaller percentage can still increase.
- What does fully diluted ownership mean?
- It means ownership calculated as if every outstanding option and unallocated pool share were already issued, giving a more complete and conservative view of ownership.
General information for founders, not legal or tax advice. Thresholds and rates change, so confirm the current position with an adviser in the relevant country before granting.