Maintaining a percentage requires new capital.
Pro-rata participation preserves ownership by buying the same percentage of a new issuance as the investor owns before the round. The required check is the current stake multiplied by the total round size.
A contractual pro-rata right and the economic ability to fund it are different. This model assumes the participation is permitted and priced identically to the round. The round size includes your check.
The formula, made clear.
- Round size
- Total new primary money including this investor’s contribution.
- Participation shortfall
- Required check less planned investment; negative means participation exceeds pro rata.
Put the numbers in context.
A 10% holder in a $6,000,000.00 round needs $600,000.00 to maintain 10%. Investing $300,000.00 at $18,000,000.00 pre-money yields 8.75%.
| Input | Example value |
|---|---|
| Current ownership | 10% |
| Pre-money valuation | $18,000,000.00 |
| Total primary round size | $6,000,000.00 |
| Your planned investment | $300,000.00 |
| Investment to preserve ownership | $600,000.00 |
What this calculation assumes
One uniform-price primary round, no option pool increase, SAFEs, notes or secondary sales. Ownership rights, exclusions and oversubscription depend on the documents.
What to consider next.
Compare the check with remaining reserves and model a later follow-on before committing a reserve plan.
How we approach financial models →