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Heres how the shares work out for each: Convertible Note Investor: $100,000 / $0.80 = 125,000 shares New Investor: $100,000 / $1.00 = 100,000 shares Now, add up all the shares after both invest: 1,000,000 (existing) + 125,000 (note) + 100,000 (new) = 1,225,000 shares Now, lets figure out who owns what percentage of the company: Existing Shareholders: (1,000,000 / 1,225,000) 100 81.6% Convertible Note Investor: (125,000 / 1,225,000) 100 10.2% New Investor: (100,000 / 1,225,000) 100 8.2% How Does Equity Dilution Impact You and Your Startup

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Calabresi, J