To use this calculator, input the investment amount, equity offered, pre-money valuation, existing shares, and option pool size. Select your preferred currency. The calculator will provide the post-money valuation, investor's ownership, and other key metrics.
The primary formula used is: Post-Money Valuation = Pre-Money Valuation + Investment Amount. Investor's ownership is calculated as (Investment Amount / Post-Money Valuation) * 100. The implied share price is determined by dividing the pre-money valuation by existing shares.
Suppose a startup has a pre-money valuation of $1,000,000 and receives an investment of $100,000 for 10% equity. The post-money valuation would be $1,100,000. The investor's ownership would be 9.09% of the company.
When using this calculator, consider the potential for future dilution from additional funding rounds. It's also important to understand the implications of option pools on overall equity distribution. For more detailed financial planning, consult with a financial advisor.