Dilution Analyzer

Overview

The Dilution Analyzer skill models ownership dilution across funding rounds, option pool expansions, and other equity events. It helps investors understand dilution mechanics and project ownership evolution through future financing scenarios.

Capabilities

Round Dilution Modeling

• Calculate dilution from new financing rounds
• Model pre-money vs. post-money mechanics
• Handle pro-rata rights and super pro-rata
• Analyze pay-to-play implications

Option Pool Analysis

• Model option pool expansions
• Calculate pool shuffle impacts
• Analyze pool placement (pre vs. post)
• Project pool runway and depletion

Multi-Round Projections

• Model ownership through multiple rounds
• Project dilution across scenarios
• Calculate cumulative dilution impact
• Analyze path to exit ownership

Anti-Dilution Modeling

• Model weighted average anti-dilution
• Calculate full-ratchet scenarios
• Analyze down-round impacts
• Assess anti-dilution protection value

Usage

Model Round Dilution

Input: Pre-money valuation, round size, pool
Process: Calculate post-money ownership
Output: Ownership table, dilution percentages

Project Multi-Round Path

Input: Current cap table, round assumptions
Process: Model rounds through exit
Output: Ownership projection, cumulative dilution

Analyze Option Pool Impact

Input: Pool expansion, placement assumptions
Process: Calculate ownership impact
Output: Pool dilution analysis, placement comparison

Model Anti-Dilution

Input: Current terms, down-round scenario
Process: Calculate anti-dilution adjustments
Output: Adjusted ownership, conversion prices

Dilution Components

Component	Impact
New Money	Primary dilution source
Option Pool	Often 15-20% pool target
Convertibles	SAFE/note conversion
Anti-dilution	Protection adjustments
Warrants	Additional dilution

Integration Points

• Cap Table Modeling Process: Core dilution analysis
• Cap Table Validator: Validate starting point
• Scenario Modeler: Feed dilution into scenarios
• Cap Table Modeler (Agent): Support agent analysis

Dilution Math

Metric	Calculation
Round Dilution	New Shares / Post-Money Shares
Cumulative Dilution	1 - (Final Ownership / Initial Ownership)
Effective Price	Pre-Money / Pre-Money Shares
Pool Impact	Pool Shares / Pre-Money Shares

Best Practices

1. Understand pre-money vs. post-money pool dynamics
2. Model realistic round sizes and frequencies
3. Consider pro-rata participation assumptions
4. Account for convertible instruments
5. Validate anti-dilution terms carefully