Fundraising and dilution
Pro rata calculator
A pro rata right lets an investor keep its percentage in the next round. This shows the cheque needed and what happens if you skip it.
Simple pro rata on the round size. Some agreements calculate on the fully diluted share count or cap the allocation; check the side letter.
How it works
To keep the same percentage, an investor buys the same share of the new round as it owns today. Holding 5% before a $10 million round means investing $500,000.
If the investor does not take it up, its stake falls by the share of the company the new round sells.
The formula
- New round shareRound size / post-money.
- Pro rata amountYour ownership x round size.
- Stake if you skipYour ownership x (1 - new round share).
Worked example
An investor with 5% facing a $10 million round at $50 million post-money needs $500,000 to stay at 5%. Without investing, the stake falls to 4%.
Put the numbers in your data room
Founders should keep a list of all pro rata rights in the data room. Lead investors in the next round ask how much of the allocation is already spoken for.
Pro rata calculator FAQ
Do all investors have pro rata rights?
No. They are usually given to larger investors in a side letter or the investors' rights agreement.
Can a lead investor limit pro rata?
Lead investors often negotiate allocations, and existing investors may agree to take less.
Is super pro rata common?
It exists but is less common; it lets an investor increase its stake in later rounds.