It is well known from numerical and experimental results that the fraction of Rydberg states (excited neutral atoms) created by tunnel ionization declines dramatically with increasing ellipticity of laser light, in a way that is similar to high harmonic generation (HHG). We present a method to analyze this dependence on ellipticity, deriving a probability distribution of Rydberg states that agrees closely with experimental (Nubbemeyer et al 2008 Phys. Rev. Lett. 101 233001) and numerical results. We show using analysis and numerics that most Rydberg electrons are ionized before the peak of the electric field and therefore do not come back to the parent ion. Our work shows, for the first time, the similarities and differences in the process that distinguishes formation of Rydberg electrons from electrons involved in HHG: ionization occurs in a different part of the laser cycle, but the post-ionization dynamics are very similar in both cases, explaining why the same dependence on ellipticity is observed.