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Founder payout after Seed-A-B dilution (worked example)
How much founders take home after three rounds, with a worked example and breakpoints for per-founder outcomes.
TL;DR outcome
- After three 20% dilution rounds, founders keep ~51% combined ownership.
- At an $85M exit, two founders split roughly $43M, or about $21.5M each.
- If dilution rises to 22% and rounds increase to four, the same exit drops below $15M per founder.
The situation
You are modeling a standard venture-backed path: Seed, Series A, Series B, then an acquisition. This is not a liquidation preference model. It is a simple dilution path that answers the question founders and boards ask early: what does a plausible exit actually mean per founder?
Inputs that matter (and which ones do not)
Matters most
- Dilution per round (compounded).
- Number of rounds.
- Exit value.
Matters, but less
- Founder count (splits the pie but does not change total founder value).
Does not matter here
- Liquidation preferences, participation, option pool refreshes (not modeled in this simple outcome).
Interactive model
Interactive model loads in the browser. Enable JavaScript to run the calculator.
Breakpoints / inflection points
The breakpoints table in the model shows the exit values required for each founder to clear $1M, $5M, and $10M. These thresholds move quickly with each extra round of dilution.
Worked example (numbers)
| Step | Value |
|---|---|
| Exit value | $85,000,000 |
| Rounds | 3 |
| Dilution per round | 20% |
| Founder ownership after dilution | 51.2% |
| Total founder payout | $43,520,000 |
| Per-founder payout (2 founders) | $21,760,000 |
What changes if...
- You add one more round: a fourth round at 20% dilution cuts founder ownership to ~41%.
- Dilution tightens: moving from 20% to 18% per round adds several million per founder.
- Exit price shifts: every $10M of exit value adds about $5M to founder payout in the base case.
Common mistakes
- Treating dilution as additive instead of compounding each round.
- Ignoring founder count when communicating take-home ranges.
- Anchoring to exit headline value without translating to founder proceeds.
Checklist / next steps
- Confirm expected dilution per round with your lead investor.
- Stress-test a lower exit value and an extra round.
- Use the full Liquidity Calculator if preferences or participation apply.
References
Last updated
- 2026-01-23: initial publication with base, upside, and downside scenarios.