Startup Cap Table & Dilution Modeler
Add stakeholders, input funding valuations, simulate option pool requirements, and visualize equity splits before and after funding rounds in complete offline secrecy.
Initial Shareholders
Funding Round Parameters
Equity Shareholder Comparison Grid
| Shareholder Name | Pre-Round % | Post-Round % | Dilution Impact |
|---|---|---|---|
| Founder A | 50.00% | 36.67% | -13.33% |
| Founder B | 35.00% | 25.67% | -9.33% |
| Early Employees | 15.00% | 11.00% | -4.00% |
| New Series Investor | 0.00% | 16.67% | +16.67% |
| Option Pool Expansion | 0.00% | 10.00% | +10.00% |
Share Allocation Comparison Charts
Startup Capitalization and Equity Dilution Explained
What is a Cap Table?
A **Capitalization Table** (or Cap Table) is a structured ledger detailing the equity ownership percentages, share counts, and options pools of a startup company. Accurate management of this model is critical for founders, as it represents who ultimately owns what fractions of the enterprise, determining voting control and the cash payout values during liquidity events (such as acquisitions or IPOs).
When a startup raises early capital (Seed or Series A), it doesn't "borrow" funds; instead, it sells newly minted ownership shares to venture capitalists or angel investors. Minting these new shares raises the overall base volume of company shares, which proportionately shrinks or **dilutes** the ownership percentage slice held by existing pre-round stakeholders (including the original founders and early employees).
Post-Money Option Pool Expansions
Venture capital investors frequently require startups to expand their **Employee Option Pool** (ESOP) to a standard size (e.g., 10% to 15%) pre-round. This ensures that new hires can be incentivized with stock options.
However, the mathematical placement of this pool expansion heavily impacts dilution. If the option pool expansion is placed in the *Pre-Money* cap table, the dilution is borne entirely by the founding team. If placed *Post-Money*, the dilution is shared proportionally across the founders and the incoming venture investors. Founders should model these scenarios carefully during investment negotiations.
The Mathematics of Dilution
When modeling equity financing, the continuous valuation relationship is expressed as:
Using this relationship, the new investor's equity allocation percentage is computed as:
To calculate post-round percentages for pre-round shareholders, we determine the remaining overall allocation (excluding investor and ESOP pools) and multiply it by their respective pre-round proportions:
Protecting Founder Equity
While dilution is a natural side-effect of scaling a business with venture capital, founders can secure several critical clauses:
- Pro-Rata Rights: Allows existing investors/founders to invest additional cash in future rounds to maintain their exact ownership percentage slice.
- Valuation Thresholds: Negotiating a higher Pre-Money Valuation directly shrinks the incoming investor's percentage allocation, reducing founder dilution.
- Anti-Dilution Provisions: Protects equity from heavy down-rounds (where shares are sold at lower valuations than prior rounds) using weighted average mechanisms.