- Value before preferences
- 250,000 EUR
- Value after preferences
- 200,000 EUR
- Difference
- 50,000 EUR
- Share of proceeds
- 0.4 %
Estimating exit payouts from equity percentages
The calculator takes a starting equity percentage and reduces it by any expected future dilution from later funding rounds or option pool top ups, then multiplies the result by an assumed exit valuation. The formula is: estimated value equals equity percentage, multiplied by one minus expected future dilution, multiplied by exit valuation, the same building blocks covered under equity management.
- Equity percentage: the current fully diluted percentage of the grant
- Expected future dilution: the estimated reduction in that percentage from future rounds, entered as a percentage
- Exit valuation: the assumed company value at a future sale or listing
Example exit value for a one percent stake
Suppose an employee holds a 1 percent fully diluted stake today. The founder expects two more funding rounds that will dilute all existing holders by a combined 30 percent by the time of exit. The company is projected to exit at a 50 million euro valuation. The employee's estimated stake at exit is 1 percent multiplied by 0.7, giving 0.7 percent, multiplied by 50 million euros, giving 350,000 euros before tax and before any strike price is deducted. See startup valuation for the mechanics.
If the grant is stock options rather than shares, the strike price paid at exercise should be subtracted from this figure to get the actual gain.
Estimates ignore tax and future round terms
- Exit valuation is a guess, most startups never reach their projected exit value
- Future dilution is hard to predict accurately this far in advance
- The result ignores tax, which can be substantial and varies by country and instrument
- The result assumes the holder is fully vested at exit, which may not be the case
Questions people ask about the payout estimate
- Does the calculator account for tax?
- No. It shows a gross estimate before any income tax, capital gains tax, or social charges that may apply.
- What if I do not know the future dilution?
- Use a conservative estimate based on how much your company expects to raise. Later stage companies with fewer planned rounds will dilute less than early stage ones planning several more rounds.
- Can this be used for stock options?
- Yes, but remember to subtract the total strike price paid from the result to see the actual gain.
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.