Angel investors
How can an angel model dilution across later rounds for an early marketplace startup?
an early marketplace 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 connects independent repair businesses with commercial property managers. Initial transactions happen in one city. The founder reports total booking value, but revenue depends on completed jobs and the platform's actual take.
Supply listings are not the same as available, reliable capacity. Booking value, collected revenue, cancellations, and repeat demand must be separated.
A simplified priced-round and cash comparison
Assume a fictional priced equity round of $2,000,000.00 at a pre-money value of $9,000,000.00. A $25,000.00 check divided by the simplified post-money amount produces 0.227% ownership. If a later issuance reduces existing holders by an assumed 26%, that interest becomes 0.168% 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 $480,000.00 of cash divided by $65,000.00 of monthly use gives 7.4 months under a constant-use assumption. Compare a completed, repeatable match with the current alternative. Separate demand acquisition from the work needed to fulfill and support each transaction. 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 | $9,000,000.00 / $2,000,000.00 |
| Fictional investor check | $25,000.00 |
| Simplified initial ownership | 0.227% |
| Assumed later dilution | 26% |
| Ownership without later participation | 0.168% |
| Cash / constant monthly use | $480,000.00 / $65,000.00 |
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
- Which bookings completed?
- What brings a buyer back?
- How much local support does each market need?
Inspect completed transaction cohorts, cancellation reasons, provider retention, and contribution costs by market. Obtain permission before contacting participants or sharing their transaction details.
A concrete next test
Choose one completed match and one cancelled booking. Trace acquisition, fulfillment, payment, and support costs for each. Ask what would bring both sides back without an incentive so the inquiry separates transaction volume from a repeatable local marketplace.
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 a completed, repeatable match with the current alternative. Separate demand acquisition from the work needed to fulfill and support each transaction.
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.