Fundraising
Cap table with the dilution waterfall attached.
Who owns what today, what a new round does to that, and what your SAFEs convert into when they land.
Who owns what today, what a new round does to that, and what your SAFEs convert into when they land.
Free download
Cap table and dilution model
Excel (.xlsx) · 3 tabs · no email required
What is in the file
A cap table is simple arithmetic that becomes hard for exactly two reasons: convertible instruments that have not converted yet, and option pools that get created at different moments depending on who is negotiating.
This template handles both explicitly, because those two things account for almost every unpleasant surprise a founder gets when the closing documents arrive.
Fully diluted ownership counts every share that could exist: issued common and preferred, options granted, options still unallocated in the pool, and warrants. It is the number that matters, and it is almost always lower than the number a founder quotes from memory.
Outstanding SAFEs and convertible notes are the exception — they are usually shown separately rather than inside the fully diluted count, because how many shares they become depends on a price that has not been set yet. That is what the third tab is for.
When an investor asks for a 10% option pool, the question that decides who pays for it is whether that pool is created before or after their money goes in.
| Pre-money pool | Post-money pool | |
|---|---|---|
| Who is diluted | Existing shareholders only | Everyone, including the new investor |
| Effect on the price | Lowers the effective pre-money valuation | Leaves the headline valuation intact |
| Typically proposed by | The investor | The founder |
On a $8M pre-money round raising $2M with a 10% pool, the difference between the two is a little over a percentage point of founder ownership. It is worth understanding before the term sheet, not after, and the waterfall tab models it both ways.
A SAFE with both a valuation cap and a discount converts at whichever gives the investor more shares — the cap price or the discounted round price. The template calculates both and takes the better one, because that is what the standard Y Combinator documents say, and because founders who model only the cap routinely underestimate their dilution.
Post-money SAFEs, which have been the standard form since 2018, dilute differently from the older pre-money version: the post-money SAFE holder's percentage is fixed at signing and is diluted only by what comes after, which means the founders absorb all the dilution from other SAFEs in the same stack. If you have several SAFEs from different years, check which form each one is.
Use it to understand and negotiate. Your legal cap table is the one your counsel maintains from the actual stock ledger and board consents — and once you have a few dozen holders, in software that tracks certificates and vesting. A spreadsheet that disagrees with the stock ledger is a spreadsheet, not a cap table.
Update it on three events and only three: a financing closes, an option grant is approved by the board, and someone leaves with unvested shares. Updating it continuously is how errors get in — every edit is a chance to break a formula, and between those three events nothing has actually changed.