# VC - Calculating Ownership Quickly

Published on Jul 18, 2019

When talking about terms with companies, it's important to keep ownership and dilution in mind on both sides.

I can use a calculator to figure out what those percentages might be but it's better to be quick at it.

Focusing on ownership, I am most likely calculating it by using the amount being raised and what post-money valuation might be.

For example, if a company is raising $1M at $4M post-money valuation then they are giving up 25% ($1M/$4M) of their company at that round.

Not including option pool, conversions into calculations at this time.

Then, if we are investing $250K of that round, we own 6.25% ($250K/$4M) of the company.

So, how can I do $250K/$4M calculation faster without using a calendar?

This is how I am doing it-

25/4 = 6 something because 4×6=24

Then there is 1 left. 1/4 = .25

So it's 6.25

That was an easy one. Let's do another one.

Putting in $300K into a $5M post-money valuation.

30/5 = 6. So 6%

Another one-

Putting in $350K into a $6.5M post-money valuation

35/6.5 = 5 something because 6 × 5 = 30 but not more than 5.83 because 5/6. I don't really know how to calculate the exact decimal but that's good enough for that conversation.

One last one-

Putting in $400K into a $7.5M post-money valuation

40/7.5 = 7×6= 42 so less than 6% and probably closer to 5.5%