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What this is: A step-by-step worksheet for calculating exactly how much of your company you're giving away in an equity deal, before you sign anything. Steps 1 through 4 walk through the formula by hand with a worked example; Step 5 is a live calculator that does the same math instantly with your own numbers.

Used in: Volume 03, Chapter 3: What Is Equity?

1

Step 1: Work Out the Pre-Money Valuation

Pre-Money Valuation = what the business is worth before the new money comes in.

Pre-Money Valuation = ______________________

Worked example (MANIAC MINDZ): ₦20,000,000

2

Step 2: Add the Investment

Post-Money Valuation = Pre-Money Valuation + Investment Amount

Amount
Pre-Money Valuation₦20,000,000
+ Investment Amount₦5,000,000
= Post-Money Valuation₦25,000,000
3

Step 3: Calculate the Investor's Percentage

Investor % = Investment Amount ÷ Post-Money Valuation × 100

Amount
Investment Amount₦5,000,000
÷ Post-Money Valuation₦25,000,000
= Investor %20%
Sticky Note Tip

Notice this used the post-money valuation, not the pre-money valuation. This is the single most common calculation mistake founders make, see Common Mistakes.

4

Step 4: Calculate the Founder's Remaining Percentage

Founder % = 100% − Investor %

100% − 20% = 80%

5

Step 5: Calculate It Live

Type your own numbers in, the post-money valuation and both percentages update as you type, using exactly the formulas from Steps 1 through 4 above.

Post-Money Valuation₦0
Investor's Percentage0%
Founder's Remaining Percentage100%
6

Step 6: Dilution Check (If This Isn't the First Investor)

If you already gave away shares before, your remaining percentage, not 100%, is what gets diluted.

Your New % = Your Old % × (Pre-Money Valuation ÷ Post-Money Valuation)

Worked example: Mr A already gave 20% to Mr B last year. He now has 80%. A new investor, Mr C, joins on terms where Mr C receives 15%.

Mr A's New % = 80% × (85% remaining pool ÷ 100%) = 68% Mr B's New % = 20% × 85% = 17% Mr C's New % = 15% Total = 68% + 17% + 15% = 100%

Run your own dilution numbers here:

%
%
Your New Percentage0%

Once you finish this worksheet, transfer the final numbers into your Cap Table Template.