Angel investors
How can an angel model dilution across later rounds for a pre-revenue B2B SaaS startup?
a pre-revenue B2B SaaS startup: Model dilution as a change in ownership under explicit assumptions.
Model dilution as a change in ownership under explicit assumptions. Later issuance, option pools, convertibles, and participation can affect the result. A percentage is not a forecast of value, proceeds, or the terms of a future round.
Start with the decision
Start with a simplified cap table, show each assumed issuance, and label what the model excludes. Compare participation and nonparticipation only as educational scenarios. Use the actual documents and qualified counsel for a real cap-table analysis.
The illustrative scenario
This is an educational workbook. The company or fund and all numerical inputs below are fictional. They are not ADIN results, customer claims, market benchmarks, or a forecast.
The fictional company is testing a reporting tool with three operations teams. Users attend demos, but no recurring contract is signed. The founder wants financing to complete integrations and test a repeatable sale.
A pilot conversation, active usage, an invoice, and a recurring commitment describe different evidence. Treat projected sales as assumptions and ask which milestone financing can realistically support.
A simplified priced-round and cash comparison
Assume a fictional priced equity round of $2,000,000.00 at a pre-money value of $8,000,000.00. A $25,000.00 check divided by the simplified post-money amount produces 0.250% ownership. If a later issuance reduces existing holders by an assumed 20%, that interest becomes 0.200% without participation.
The exercise omits option pools, convertibles, preferences, fees, side agreements, and other actual terms. It is not a SAFE conversion model or a recommendation to invest or preserve ownership. Actual cap-table and document analysis belongs with qualified advisers. A percentage of ownership does not specify eventual proceeds or protect against total loss.
The fictional company's $420,000.00 of cash divided by $60,000.00 of monthly use gives 7.0 months under a constant-use assumption. Compare the current evidence with the specific next milestone. An attractive market story does not establish that this team can reach its buyer. Connect that simple quotient to dated obligations and milestones before drawing a conclusion about financing needs or progress.
| Item | Illustration |
|---|---|
| Assumed pre-money value / round size | $8,000,000.00 / $2,000,000.00 |
| Fictional investor check | $25,000.00 |
| Simplified initial ownership | 0.250% |
| Assumed later dilution | 20% |
| Ownership without later participation | 0.200% |
| Cash / constant monthly use | $420,000.00 / $60,000.00 |
Use this worksheet
Answer the questions with a source, date, owner, and next action. Mark an unknown as unknown. Use public or permissioned information and involve a qualified specialist when a question requires expertise beyond the team’s competence.
- What is the starting ownership?
- Which issuance is assumed?
- Does the holder participate?
- What instruments are omitted?
- Who checked the actual cap table?
Questions specific to this scenario
- Who owns the customer's budget?
- What milestone comes before the next raise?
- Which projection has independent support?
Review permissioned pilot notes, usage records, customer references, and a dated cash forecast. Clarify what is confirmed by the customer rather than inferred by the founder.
A concrete next test
Ask a pilot participant to describe the last time the reporting problem occurred and the next approval needed for a purchase. Compare that account with the founder's pipeline stage. Record an explicit unresolved step rather than interpreting meeting attendance as contract intent.
Interpret the result
A dilution model helps explain mechanics and dependencies. It does not establish that maintaining ownership is desirable or affordable, and it should not disguise unknown future financing terms as facts.
Compare the current evidence with the specific next milestone. An attractive market story does not establish that this team can reach its buyer.
Sources and method
These primary resources provide background for the concepts. The fictional scenario, calculations, and worksheet are ADIN educational examples; the sources do not report or validate those invented results. Reviewed October 11, 2026.