Start from the milestone, not the valuation
Decide what the next round requires you to have proven, cost eighteen to twenty-four months of getting there, add a buffer, and that is the raise. A round sized to hit a headline valuation rather than a milestone tends to fund twelve months of activity and no proof.
The customary range
Priced seed rounds typically land between 10% and 25% dilution, clustering near 20%. Below 10% usually means the raise is too small to move the company; above 25% at seed leaves too little room for the Series A and the pools that follow.
| Round | Common dilution | What it usually buys |
|---|---|---|
| Pre-seed | 5-15% | Prototype and first design partners |
| Seed | 15-25% | Repeatable acquisition and early revenue |
| Series A | 15-25% | A sales motion that scales with headcount |
The option pool is dilution in disguise
A pool created before the round closes comes out of the pre-money valuation, which means founders pay for it alone. A 10% pool on top of 20% new-investor dilution can leave founders roughly 28% lighter, not 20%.
Negotiate the pool against a real hiring plan for the next eighteen months. A pool sized by convention rather than by named roles is a transfer of value with no staffing rationale behind it.
Safes and notes convert later, but they still count
Uncapped enthusiasm at the pre-seed stage becomes visible dilution at the priced round. Maintain a fully diluted cap table that models every outstanding instrument at its conversion terms before agreeing to a new one.
Sanity-check the implied valuation
Once the raise and the target dilution are set, the valuation is determined: raise divided by dilution equals post-money. If that number is far from what comparable companies at your stage command, the constraint is usually the raise size, not the market. The free valuation calculator runs the same check with scorecard and venture-method cross-references.
Part of a guide
Startup financials: unit economics, runway and valuation
A guide to the financial questions that decide early-stage outcomes: CAC, LTV and payback, burn rate and runway, how much runway to hold, and how pre-revenue companies get valued.