ESOP Dilution Calculator
Model how creating or increasing an Employee Stock Option Pool (ESOP) will impact the ownership percentage of founders and existing shareholders.
Your dilution analysis will appear here.
Understanding ESOP Dilution
An Employee Stock Option Pool (ESOP) is essential for attracting top talent, but it comes at a cost: dilution. This calculator helps you understand how creating a new ESOP pool will reduce the ownership percentage of existing shareholders (like you and your co-founders).
What is Dilution?
Dilution is the decrease in an existing shareholder's ownership percentage of a company as a result of the company issuing new shares. When you create an ESOP pool, you are setting aside a new block of shares, which dilutes everyone who owned shares before the pool was created.
The "Pre-Money" Shuffle
When you raise a funding round, investors will almost always require you to create or increase the ESOP pool as part of the pre-money valuation. This means the dilution from the option pool is borne entirely by the founders and existing shareholders, not the new investors. This calculator models that exact scenario.
How to Use This Tool
Enter your current cap table and the desired ESOP pool percentage. The "Post-Dilution Ownership" column shows what your new ownership percentages will be *after* the pool is created but *before* a new investor's money comes in. This is a critical piece of information for any fundraising negotiation.
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