There is math and then there is startup math. For many entrepreneurs this includes evaluating an angel or seed round investment that requires an option pool.
I created this handy Google Spreadsheet to help you do the math for this typical situation:
- The startup is founder held before the round.
- The round requires an option pool and the pool needs to be created before the investment happens. (i.e., in the pre-money.)
Let me know what you think. Always looking to improve it.
It’s aways surprising to me how many founders don’t understand this simple example of dilution.
Here is another model I have always liked, from Venture Hacks. It’s a bit more complicated.
http://venturehacks.com/articles/cap-table