Cap Table Model
Model startup cap tables and equity dilution across funding rounds. Understand ownership changes for founders, investors, and option pools.
Calculator
Company valuation before investment
Amount being invested in this round
Founder ownership before this round
Equity reserved for employee options
Click "Calculate Cap Table" to see your results
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Understanding Cap Tables
A capitalization table (cap table) tracks ownership stakes in a company. It shows who owns what percentage of the company and how that changes with each funding round, option grants, and exits.
Calculation Method
- Post-Money Valuation: Pre-Money Valuation + Investment Amount
- Investor Ownership: (Investment Amount ÷ Post-Money Valuation) × 100
- Founder Ownership After: 100% - Investor % - Option Pool %
- Dilution: Founder Ownership Before - Founder Ownership After
Key Concepts
- Pre-Money Valuation: Company value before new investment
- Post-Money Valuation: Company value after new investment
- Dilution: Reduction in ownership percentage from new shares
- Option Pool: Shares reserved for employee equity compensation
- Fully Diluted: Ownership assuming all options are exercised
Typical Dilution by Round
- Seed Round: 10-25% dilution
- Series A: 20-30% dilution
- Series B: 15-25% dilution
- Later Rounds: 10-20% dilution each
Important Considerations
- Option pools are typically created before the round (diluting founders)
- Preferred stock terms can affect economics beyond ownership %
- Anti-dilution provisions protect early investors
- Founder vesting protects the company and investors
Frequently Asked Questions
How does dilution work in startup funding?
When you raise money, new shares are created for investors, which reduces (dilutes) everyone else's ownership percentage. If you own 100% and raise money for 20% of the company, you now own 80%. The company is worth more, but you own a smaller piece of a bigger pie.
What is a typical option pool size?
Most startups create option pools of 10-20% of fully diluted shares. Early-stage companies often start with 10-15%, while later-stage companies might have 15-20% to attract senior talent. VCs typically require the option pool to be created before their investment, diluting founders rather than investors.
How much equity do founders give up per round?
Founders typically give up 10-25% in seed rounds, 15-30% in Series A, and 15-25% in Series B. By the time a company reaches Series C or later, founders often own 15-30% collectively. The key is balancing dilution with the value each round brings in capital and strategic support.
What is fully diluted ownership?
Fully diluted ownership assumes all options, warrants, and convertible securities have been exercised. This is the most conservative way to calculate ownership and is typically used in term sheets and cap tables. It shows what your ownership would be if everyone exercised their rights to buy shares.