Why AI Startups Are Selling the Same Equity at Two Different Prices
AI startups are increasingly using dual-pricing: selling identical shares at two different prices in one round. Lead investors get a lower valuation; follow-on investors pay a premium. TechCrunch, PitchBook, and Carta track this trend. This calculator helps founders and investors understand dilution, blended price, and implied valuations.
Ready to run the numbers?
Why: AI funding rounds are often oversubscribed. Rather than turning away investors, startups use dual-pricing: leads get better terms at a lower valuation, others participate at a premium. This creates a blended effective price and different implied valuations per tier.
How: Enter pre-money valuation, round size, tier 1 and tier 2 prices, tier 1 allocation %, and pre-round share counts. The calculator computes shares issued at each tier, effective blended price, founder dilution, ownership percentages, and implied valuation delta.
Run the calculator when you are ready.
📊 Tier 1 vs Tier 2: Price & Shares
Compare price per share and shares issued at each tier.
🍩 Post-Round Ownership
Ownership breakdown after dual-pricing round.
📈 Dilution Progression
Ownership % across pre-round, post-round, and investor tiers.
📊 Blended vs Tier Valuations
Implied valuation at each tier vs post-money blended.
For educational and informational purposes only. Verify with a qualified professional.
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CalculateDual-pricing equity lets AI startups sell identical shares at two different prices in one round. Lead investors (Tier 1) get a lower price; follow-on investors (Tier 2) pay a premium. Aaru raised at $450M for leads and $1B for others in the same Series A. The effective blended price = total capital / total new shares. Founders dilute based on total new shares issued.
Sources: TechCrunch, PitchBook, Carta, SEC.
Key Takeaways
- • Dual-pricing consolidates two rounds into one: leads at lower valuation, follow-ons at premium.
- • Blended effective price = total round size / total new shares issued.
- • Founder dilution depends on total new shares, not on which tier invested.
- • Headline valuation often reflects the higher tier; cap tables show both prices.
Did You Know?
How Does Dual-Pricing Work?
Tier 1 (Lead)
Lead investors commit a majority of the round at a lower price per share. They receive more shares per dollar and better economics.
Tier 2 (Follow-on)
Follow-on investors participate at a higher price. They pay a premium for access to oversubscribed rounds.
Blended Valuation
Post-money = pre-money + round size. Blended price = round size / total new shares. Implied valuation differs by tier.
Expert Tips
Dual-Pricing vs Traditional Rounds
| Aspect | Traditional | Dual-Pricing |
|---|---|---|
| Price per share | Single price | Two prices (tier 1 & 2) |
| Headline valuation | Matches cap table | Often tier 2 (higher) |
| Lead economics | Same as all | Better (lower price) |
Frequently Asked Questions
What is dual-pricing equity in AI startups?
Dual-pricing equity means AI startups sell identical shares at two different prices within the same round. Lead investors (Tier 1) get a lower price; follow-on investors (Tier 2) pay a premium. This consolidates two rounds into one while creating a blended valuation.
Why do AI startups use dual-pricing?
AI rounds are often oversubscribed. Rather than turning away investors, startups accommodate excess demand by letting leads secure better terms at a lower valuation while allowing others to participate at a premium. It signals validation while maximizing flexibility.
How does dual-pricing affect investors?
Tier 1 investors get more shares per dollar and better economics. Tier 2 investors pay a premium for access. The effective blended price sits between the two tiers. All investors receive the same share class and rights.
What is the dilution impact of dual-pricing?
Founders and existing investors dilute based on total new shares issued. The blended effective price determines the implied post-money valuation. Higher tier 2 allocation increases the headline valuation but dilutes everyone equally.
Are there legal implications for dual-pricing?
Dual-pricing is legal when disclosed in term sheets and cap tables. SEC and Carta track different price tiers. Investors must receive clear disclosure. Some VCs compare it to airline-style price discrimination.
How does dual-pricing compare to traditional rounds?
Traditional rounds use a single price. Dual-pricing merges what would be two rounds (e.g., Series A at $450M and Series A-1 at $1B) into one. The headline valuation often reflects the higher tier, not the blended average.
Key Statistics
Official Data Sources
⚠️ Disclaimer: This calculator is for educational purposes only. It does not constitute legal, tax, or investment advice. Dual-pricing structures vary by deal. Consult qualified counsel and advisors before making funding decisions. Not financial advice.
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