Set the analysis boundary
Use option pool dilution when every figure can be tied to the same capitalization file. Estimate new option shares required for a target post-financing pool percentage and show existing-holder dilution. Otherwise resolve the dataset before calculating.
In a reconciled option pool dilution case, retain the unrounded figures used by the browser. Presentation rounding should occur after reconciliation.
Derive the headline value
The source trail for option pool dilution supports this point: only form values drive the output. Required pool shares solve target percentage against pre-round, investor, and existing option shares. No current market rate or platform rule is silently inserted.
Interpret the number with its denominator
From the option pool dilution evidence, do not treat association as causation. The capitalization file may show movement without explaining why it occurred.
Start sensitivity work with Target post-round option pool. Changing several fields at once makes the variance difficult to attribute.
A material variance in option pool dilution deserves a root-cause review; the formula identifies scale but not the cause.
When Target post-round option pool changes, assess both dollar exposure and operational reach. Either dimension can make the option pool dilution variance important.
Against the defined option pool dilution base, when founder equity split changes, rerun the Founder Equity Split Calculator without revising this history.
Input definitions and cutoff
The operating meaning of option pool dilution begins here: check the unit attached to Pre-round shares excluding pool; Identify whether pre-round shares excluding pool is observed or forecast. Do not offset Pre-round shares excluding pool against Existing ungranted options beyond the displayed equation.
If Existing ungranted options is forecast, distinguish it from recorded values. Label reversals affecting existing ungranted options. Check whether Existing ungranted options and New investor shares share a customer or contract base.
When New investor shares changes, save a new comparison case. Tie new investor shares to a dated export. Align the date for New investor shares with the cutoff applied to Target post-round option pool.
Against the defined option pool dilution base, the file should preserve the raw value for Target post-round option pool. State any allocation included in target post-round option pool. Flag conversions applied to Target post-round option pool before comparing it with Pre-round shares excluding pool.
Test data for the model
Within the option pool dilution analysis, run the software check with these values: Pre-round shares excluding pool = 7.2e+06 shares; Existing ungranted options = 400000 shares; New investor shares = 2e+06 shares; Target post-round option pool = 12%.
The working file for option pool dilution indicates that use full precision during the manual check and compare presentation rounding only at the end.
Remaining commercial questions
The operating meaning of option pool dilution begins here: further review is necessary where Securities law, tax treatment, legal rights, preferences, vesting, and negotiated financing terms are not determined.
For this option pool dilution population, document why the analysis was prepared and which business action it was intended to inform.
Questions for the source owner
How are canceled items treated?
Against the defined option pool dilution base, apply one cancellation rule to both numerator and denominator where relevant.
How should missing values be handled?
When discussing option pool dilution, resolve or label them missing rather than silently treating them as zero.
Does a favorable number mean action is safe?
In a reconciled option pool dilution case, no. Commercial, legal, operational, and financial risks remain separate.
Should low and high cases be averaged?
A review of option pool dilution shows why keep them separate when the consequences of each assumption matter.