Last updated: 2 November 2026
Startup dilution is the fall in an existing owner’s percentage when new shares are issued. Typical dilution per round runs about 14% to 23%, so founders should model each raise before signing.
What is dilution?
Dilution is the fall in an existing owner’s percentage when new shares are issued, whether to new investors, an option pool or convertible securities. Value does not have to fall: a smaller share of a bigger company can be worth more.
The formula is: new ownership = old ownership x (shares before / shares after). This keeps the arithmetic clear when new shares are created.
For example, a founder owns 1,000,000 of 1,000,000 shares, which is 100%. The company then issues 250,000 new shares to an investor. The founder now owns 1,000,000 / 1,250,000 = 80%, so they are diluted by 20 percentage points, while the investor owns 20%. In plain terms, the founder still has the same share count, but that count is now a smaller slice of a larger pie.
How much dilution per round is typical?
Pre-seed rounds done on SAFEs show a median dilution of 13.6% for $500K to $1M raised, and 19.4% for $1M to $2.5M raised, reported by MEAN, a secondary blog summarising Carta data from 2026. This suggests that even very early money can take a meaningful slice when the round is larger.
Seed rounds that are priced show about 20% median dilution, with a range of 15% to 23% in Q1 2026, also reported by MEAN. One search summary of Carta data for the six months to July 2026 reports seed median dilution of 18%, reported by a secondary search summary of Carta data. The two seed figures are close, but they are not identical, which is a reminder to read the source and date.
Series A figures vary by source. MEAN reports 18% to 23%, depending on source, with one summary at 23% for Peony and a Carta-based summary at 18%, and a median round size of $20M in that blog. The same search summary of Carta data for the six months to July 2026 reports Series A median dilution of 18%. Series B is about 17% per round, per a Qubit Capital analysis of Carta data reported by MEAN.
These sources conflict, so the sensible reading is a range rather than a target. A founder should treat 14% to 23% as a broad band, not a promise, and should ask which data set and which quarter a number comes from.
How much do founders own after each round?
After seed, the median founding-team stake is 56%, reported by MEAN. This is a useful checkpoint: if your team is far below this after seed, it is worth checking whether the round, the pool or both were larger than planned.
After Series A, the median founding-team stake is 36% overall, split as 37.5% for digital and SaaS companies and 30.5% for physical and biotech companies. The sector split matters because capital needs differ, so the same nominal round can leave different residual ownership.
After Series B, founders hold between 21.8% and 27.3%, depending on sector. After Series C, the figure is 16.1%. By that stage, the founding team is usually a minority in percentage terms, even if the company is worth far more.
| Stage | Founding-team stake |
|---|---|
| After seed | 56% median |
| After Series A | 36% overall; 37.5% digital/SaaS; 30.5% physical/biotech |
| After Series B | 21.8% to 27.3% by sector |
| After Series C | 16.1% |
In plain terms, percentage ownership falls sharply with each round, but it should be judged alongside company value, not in isolation.
Worked example across two rounds (ours)
Start with founders at 100%. Create a 10% option pool before a seed round, so founders move to 90%. The seed sells 20%, so founders become 90% x 0.80 = 72%. At Series A the round sells 20% and the pool is topped up by 5 points of the new total, so founders become roughly 72% x 0.80 x 0.95 = 54.7%. The arithmetic is 0.72 x 0.80 = 0.576, then 0.576 x 0.95 = 0.5472.
This is a hypothetical example, but it shows why pre-round pool creation and a top-up both matter. A founder who ignores either step can overestimate their final stake by several percentage points.
What increases dilution besides new investors?
Option pool creation or top-up before the round increases dilution, as set out in the option pool guide. The key point is timing: creating the pool before the round means existing owners absorb more of the cost.
SAFEs and convertible notes converting at the next round also increase dilution, as described in the SAFE guide and convertible note page. With a post-money SAFE, investor ownership % = investment / post-money valuation cap, per Y Combinator documents and a search summary. That formula is simple, but it can move the final split more than founders expect.
Down rounds and anti-dilution provisions can also change ownership, as covered in the down round page. These effects are not part of the headline round percentage, so they need to be modelled separately.
How to model it
Build a cap table with each round as a column, and include the pool and SAFEs on an as-if converted basis, as described in the cap table guide. This gives one view of ownership before and after each event, rather than a series of disconnected guesses.
Compare scenarios such as a higher valuation, a smaller pool or a bigger round, so the effect of each choice is visible before signing. If a change in one assumption moves the founder stake by several points, that is the number to negotiate on.
Frequently asked questions
Is dilution the same as losing value?
No. Dilution is a fall in percentage ownership, not necessarily value. A smaller share of a larger company can be worth more than a larger share of a smaller one.
What is a normal seed dilution?
A priced seed round shows about 20% median dilution, with a range of 15% to 23% in Q1 2026. Pre-seed SAFEs show a median of 13.6% for $500K to $1M raised and 19.4% for $1M to $2.5M raised.
Do SAFEs dilute founders?
Yes. SAFEs convert at the next priced round, so they add shares and reduce the founder percentage. With a post-money SAFE, investor ownership % = investment / post-money valuation cap.
Should I worry about option pools?
Yes, because creating or topping up a pool before a round dilutes existing owners. The effect is larger when the pool is created before, rather than after, the new investment.
How often should I update my cap table?
Update it whenever shares, pools or SAFEs change, and model each round as a column. That keeps the as-if converted view accurate for the next raise.
Sources
- Mean CEO: dilution benchmarks 2026 (summarising Carta data)
- Y Combinator: documents and post-money SAFE
- Promise Legal: cap tables
Figures and prices were checked on 2 November 2026; check the linked sources before relying on them. This article is general information, not tax, legal or investment advice.
