Learn what equity dilution may cost you
Adjust the dilution calculator inputs below to reveal what happens when you sell equity to grow versus using founder-friendly debt financing.
The cost of capital calculator equates the cost of funds a startup raises to finance its growth. The formula for the cost of capital is composed of separate calculations for debt and equity, which are compared to derive the expected ownership and value retained for these finance options. Please note this calculator is not a crystal ball. We can only help you estimate the potential ownership value retained between these funding options.
“We were extremely happy just running a profitable small business that did good work for good people if that’s what made the most sense. Accepting venture money means giving up a certain amount of control over your long-term trajectory, and we just weren’t sure that we were ready to do that. The investments we made with the Lighter Capital dollars were exactly what gave us the confidence to charge down the VC-backed route, and we’ve never looked back.”
CEO at dbt Labs
Still weighing your financing options?
Deciding how to fund an early-stage startup is notoriously tough. Sure, raising an equity round with angels or VCs might get you the capital you need (and perhaps some flattering press coverage), but it pulls your time and focus away from running your business, comes with stipulations, and it can be very costly later.
Say you're one out of 10,000 startups to successfully raise a big equity round (yes, those are your actual odds) but you can’t meet the aggressive targets set by your investors; your next round might be a down round, which can lower your ownership value, zap momentum, and instill unnecessary doubt.
On the other hand, your startup might continue to gain traction after that raise, which is great! One big problem, though — you handed over a big slice of equity to your investors that could have stayed with you and your team.
You've taken your business this far. Couldn't your startup reach its next milestone with non-dilutive growth capital from a partner who supports you like a VC would and doesn't get in your way?
Maybe it's not such a tough decision after all.
Lighter was brilliant because of how easy and fast it was to access capital. Being non-dilutive and affordable are great, but time is everything for a founder. The VC support was absolutely above & beyond, and included an intro to one of our eventual investors.”
Co-Founder and CEO at Flip
Skip the business plan, pitch decks, and presentations.
Invest your time into building your business, instead.
Got questions? Contact us to chat with one of our knowledgeable Investment Advisors.
Startup Equity Dilution Calculator
Need capital to scale your startup? How do you know if the time is right to raise capital from angel investors or VCs, or if it’s more advantageous to explore alternative financing options that let you retain valuable ownership?
If you’re considering selling equity to raise capital, there's an easy way to understand what that slice of the pie could be worth: look at a side-by-side comparison of your ownership value at exit for dilutive and non-dilutive funding scenarios.