Startup Capital Appreciation Engine - Simulate VC equity dilution, valuation growth, MOIC & IRR
In venture capital, equity gets diluted round by round while valuation grows. The "dilution-valuation crossover effect" shows how explosive valuation growth can offset dilution losses, reflecting the power-law return characteristics of the VC industry.
Each funding round dilutes existing shareholders. If the dilution rate is 25%, a 20% stake becomes 15% after one round. However, if the valuation triples, the holding value still grows significantly despite owning a smaller percentage.
VC returns follow a power-law distribution. Most investments lose money, but a few "unicorn" winners generate outsized returns that cover all losses. This is why understanding the dilution-valuation crossover is critical for venture investors.
Read the chart: Blue bars show your holding value at each round. Green bars show post-money valuation. The yellow curve tracks your cumulative MOIC. Red markers appear when dilution exceeds growth in a round.