The timing of the pool changes who pays for it.
In a pre-money pool top-up, the existing capitalization is expanded before pricing the new investor shares. The new investor still receives the negotiated investment divided by post-money valuation, while existing holders bear the reserve increase.
A post-round reserve target must account for dilution of the pool by the round itself. Existing unallocated reserve reduces the required increase. If that reserve already exceeds the target after the round, this model creates no new pool and does not cancel existing shares.
The formula, made clear.
- Existing pool
- Unallocated reserve as a fraction of current fully diluted shares.
- Retained ownership
- Your current ownership multiplied by f.
- Incremental pool
- 1 − b − f of the post-round capitalization.
Put the numbers in context.
At 8 million pre-money and 2 million raised, investors own 20%. An existing 5% reserve and a 10% post-round target leave the existing capitalization with 73.6842%; an 80% holder retains 58.9474%.
| Input | Example value |
|---|---|
| Pre-money valuation | $8,000,000.00 |
| Primary investment | $2,000,000.00 |
| Your existing ownership | 80% |
| Existing unallocated pool | 5% |
| Minimum post-round unallocated pool | 10% |
| Your post-round ownership | 58.95% |
What this calculation assumes
One primary priced round and pre-money pool increase, no converting securities or grants. The target is a minimum unallocated reserve after the round. Existing stake plus unallocated reserve cannot exceed 100%.
What to consider next.
Confirm whether negotiations refer to allocated or unallocated options and a pre-money or post-money target. Reconcile with the actual share ledger.
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