| Name | Shares | |
|---|---|---|
| Round | Investment ($) | Pre-Money ($) | Add'l Pool (%) | |
|---|---|---|---|---|
Capitalization Table
Fully diluted ownership after all rounds
| Shareholder | Shares | Ownership % | Value at Latest Round |
|---|
Round-by-Round Ownership
How ownership changes after each round
What Is a Cap Table?
A capitalization table (cap table) is a spreadsheet or document that shows who owns what in a company. It lists every shareholder — founders, investors, employees with stock options — along with the number of shares they hold, the percentage of the company they own, and the value of that equity at a given valuation.
Cap tables start simple. Two co-founders split 10 million shares. But they get complicated fast: option pools, SAFEs, convertible notes, preferred stock, anti-dilution provisions. By Series B, most startups are managing dozens of line items across multiple share classes.
For fundraising, the cap table is the single most important document. It determines how much of the company you're giving away in each round, what your shares are worth, and whether your equity still means something after three rounds of dilution. Investors review it before every term sheet. If it's messy or unclear, that's a red flag.
This calculator models a simplified cap table with common shares. For a detailed look at how individual rounds reduce founder ownership, see the Portfolio Dilution Calculator.
How Equity Dilution Works in Practice
Dilution occurs whenever a company issues new shares. When a startup raises a $2M seed round at an $8M pre-money valuation, the post-money valuation is $10M. The investor gets 20% of the company ($2M / $10M). The founders' percentage drops from 100% to 80% — but their shares are now worth $8M instead of whatever notional value they started at.
Dilution compounds across rounds. If a founder starts at 50% and each round dilutes by 20%, after three rounds they hold 50% × 0.8 × 0.8 × 0.8 = 25.6%. That's before the option pool, which typically takes another 10-15% off the top at each priced round.
The key insight: dilution isn't inherently bad. A founder who owns 15% of a $500M company is better off than one who owns 60% of a $10M company. What matters is whether each round of dilution is creating proportionally more value than the equity it costs. The cap table is where you track that math.
Key Cap Table Terms
- Fully diluted shares: The total number of shares if every option, warrant, and convertible security were exercised or converted. This is the denominator investors use to calculate ownership percentages.
- Option pool (ESOP): A block of shares reserved for employee stock options. Investors typically require an option pool to be created before the round prices, which means it dilutes existing holders but not the incoming investor.
- Price per share: Pre-money valuation divided by fully diluted shares outstanding. This sets the price at which the new investor buys shares and determines how many shares they receive.
- Pre-money valuation: The agreed value of the company before new investment money comes in. Pre-money + investment = post-money.
- Post-money valuation: The company's value immediately after the investment. Used to calculate each shareholder's equity value at that moment.
- Pro rata rights: The right for existing investors to participate in future rounds to maintain their ownership percentage. Not modeled in this calculator but common in term sheets.
This calculator models simplified common-stock cap tables. Real cap tables include preferred stock, liquidation preferences, anti-dilution provisions, vesting schedules, and convertible instruments (SAFEs, notes). Consult legal and financial professionals for actual cap table management.
Frequently Asked Questions
How do I read a cap table?
A cap table has rows (shareholders) and columns (shares, ownership percentage, value). Start with the bottom row — the fully diluted total. Then look at each shareholder's percentage relative to that total. The "value" column multiplies their shares by the latest price per share to show what their equity is worth on paper.
When should I create a cap table?
At incorporation. Even if you're two co-founders splitting equity 50/50, formalize it. Every subsequent event — hiring employees with options, bringing on advisors, raising capital — changes the cap table. Starting early keeps it clean and avoids disputes later.
How much dilution is normal per round?
Seed rounds typically dilute founders by 15-25%. Series A rounds typically dilute by 20-30%. By Series C, founders often hold 10-20% of the company. These are rough benchmarks — the actual range depends on valuation, amount raised, and how much leverage the founder has in negotiations.
What's the difference between a cap table calculator and a dilution calculator?
A dilution calculator focuses on how much existing shareholders get diluted by a new round. A cap table calculator shows the full ownership picture: every shareholder, their share counts, percentages, and values across all rounds. Think of dilution as one column in the cap table.
Should the option pool be created before or after the round?
Standard venture practice is to create (or top up) the option pool before the round prices — meaning it dilutes existing holders but not the new investor. This is called the "pre-money option pool shuffle." Founders should negotiate the pool size carefully, since a larger pool means more dilution to existing shareholders before the investor even writes a check.
How does this calculator handle convertible notes and SAFEs?
It doesn't. Convertible instruments (SAFEs, convertible notes) convert into equity at a future priced round, often with a discount or valuation cap. Their conversion creates additional dilution that's not reflected until the conversion event. For accurate modeling of convertibles, use a dedicated SAFE calculator or consult your attorney.
