Finance
The Cap Table
Every round dilutes. This is the ledger that tracks who owns how much, and what a founder keeps.
A cap table is a company's ownership history written as arithmetic. It answers the founder's most important question: after I raise the money I need, how much do I still own? Every new share issued dilutes everyone who does not buy in. The example follows a company from founding through a seed and a Series A.
Assumptions
- Founders' initial shares
- 8,000,000
- Seed raise
- $1.5M @ $6M pre
- Series A raise
- $5M @ $15M pre
- Option pool
- 15% post-Series A
Step by step
1. 1 · Founding
Two founders split 8,000,000 shares — that is 100% of the company. Ownership percentage is always , so the total-shares denominator is the number that matters. It only ever grows.
2. 2 · The seed round
Raising 6M pre-money means post-money 1.5/7.5 = 20%$. To sell 20% of the enlarged company, the firm issues 2,000,000 new shares (8M / 0.8 − 8M). Founders now own 8M / 10M = 80%.
3. 3 · Series A + option pool
Series A buys 25% (20M post). A 15% option pool is created at the same time. Both dilute the founders and the seed investor. The lesson is compounding: two rounds later, founders who started at 100% may hold well under half — which can still be worth far more in absolute dollars. Ownership percentage falls; ownership value is what you optimise.
The spreadsheet
The full model as a table — download it as a CSV to open in any spreadsheet app.
| Holder | At founding | After seed | After Series A |
|---|---|---|---|
| Founders (shares) | 8000000 | 8000000 | 8000000 |
| Founders (%) | 100.0% | 80.0% | 51.0% |
| Seed investors (%) | — | 20.0% | 15.0% |
| Series A (%) | — | — | 25.0% |
| Option pool (%) | — | — | 15.0% |
| Total shares | 8000000 | 10000000 | 15686275 |