priced-round-math

Priced venture-round dilution math — the option-pool shuffle (solve the pre-money pool top-up needed to hit a post-close target), price per share, investor share counts, and ownership tables with hard invariants. Zero dependencies.

npm install priced-round-math

Why

"$2M on $8M pre with a 10% post-close pool" hides a linear equation: the new pool is created pre-money, so it comes out of the existing holders — the famous option-pool shuffle. Every founder negotiating a term sheet, and every tool that models one, needs this exact solve. This package does the algebra and reports what the pool really cost (effectivePreMoney).

import { pricedRound } from "priced-round-math";

const r = pricedRound({
  preMoney: 8_000_000,
  investment: 2_000_000,
  preRoundFullyDiluted: 8_000_000,
  targetPoolPostClose: 0.10,
});

r.investorOwnership;  // 0.20  — always exactly investment / post-money
r.poolOwnership;      // 0.10  — hits the target exactly
r.poolTopUp;          // the shares created pre-money
r.pricePerShare;      // lower than without the pool — that's the shuffle
r.effectivePreMoney;  // preMoney minus the value handed to the new pool

API

• pricedRound({ preMoney, investment, preRoundFullyDiluted, existingUnallocatedPool?, targetPoolPostClose?, rounding? }) — full solve. An existing unallocated pool reduces the top-up; if it already exceeds the target, poolTopUp is 0. Unsolvable targets (t × postMoney/preMoney ≥ 1) throw with an explanation. targetPoolPostClose is the unallocated pool as a fraction of post-close fully diluted shares.
• rounding (opt-in): { pricePerShareDecimals?: number, pricePerShareRounding?: "nearest" | "down", wholeShares?: boolean }. pricePerShareDecimals rounds the PPS (4 → $1.2345), to nearest by default as in the YC SAFE User Guide examples, or "down" to truncate; wholeShares rounds the pool top-up up (target is a minimum) and investor shares down. cashInvested reports what the whole shares actually cost. With rounding on, the identities below hold only approximately (investor % is at most a share away from investment/post-money). Term sheets differ on rounding; check yours.
• simplePricedRound(preMoney, investment, preRoundFD) — no pool top-up.
• diluteHolders(holders, round, preRoundFD) — per-holder before/after ownership and dilution.

Without rounding, every figure is exact (fractional shares). Invariants enforced by the test suite: ownership fractions sum to 1; investor % ≡ investment/post-money regardless of the shuffle; PPS ≡ preMoney/(preRoundFD + poolTopUp); all holders dilute by the same factor. Checked against an independent exact-rational solver (5,000 random rounds, 45,000 values, worst relative error 7e-15) and the Venture Hacks worked example ($2M on $8M pre with a 20% post-close pool → $6M effective pre-money).

Related

Part of a cap-table math family: safe-stack-conversion · exit-waterfall · vesting-schedule-math.

Author

Built by Moshe Malka — engineering leader in New York City. Studio work at Quentin.Code.

MIT © Moshe Malka