Introducing Our Capitalization Financing Simulation Feature
Navigate to: [Capitalization] → [Scenario Simulation]
1. Upon receiving additional rounds of funding, share dilution typically takes place in proportion to the company value and round funding amount.
Our [Scenario Simulation] feature shows how each stakeholder's ownership position changes upon dilution from new funding rounds.
2. Enter the required fields: Pre-money Valuation, Total New Investment, and New Option Pool (%).
3. Select one of three option pool calculation methods:
Pre-money: Option pool increase is calculated based on pre-money valuation (before receiving investment). New investors are not subject to dilution;
Post-money: Option pool increase is calculated based on post-money valuation (after receiving investment). New investors are subject to dilution; or
Total number of shares: Option pool increase is calculated by multiplying the total number of shares post financing and option pool rate.
4. Select one of two convertible conversion method:
Pre-financing: Convertibles are converted before the investment. Convertibles only dilute current shareholders, and new investors are not subject to dilution; or
Post-financing: Convertibles are converted with the investment. Both the current shareholders and new investors are diluted.
5. You may choose to run scenarios involving convertible notes and SAFEs scenarios from our dropdown edit menu.
6. Add investors and select investment type. You may choose among “New Issuance”, “Share Transfer” or “New + Existing”.
If you choose “Share Transfer” or “New + Existing” option, select the sender on your right.
7. Once you are finished entering the required information, select [Run Simulation] and view the post-money valuation, total investment amount, price per share, and option pool amount. You can also see the ownership changes of each investor from each funding round.
8. “List of New Issuance” tab displays solely the equity of new shareholders.