Cap Table Calculator

A clean cap table has a small number of clearly defined stakeholders: founders, an option pool, and institutional investors with standard terms. Red flags include many small angels with side letters, complex convertible note stacks with different terms, or former founders/employees with large undocumented stakes. Clean cap tables make future fundraising much easier.

The option pool is typically created from the pre-money capitalization, meaning founders bear 100% of the dilution, not new investors. A 10% option pool on a $10M pre-money effectively reduces the founder's share of the pre-money by 10%. This is often called the 'option pool shuffle' and is one of the most significant but least understood sources of founder dilution.

In a down round (lower valuation than the previous round), new investors get a much larger ownership percentage for the same dollar amount. If prior investors have anti-dilution protection (which is standard), their shares may be adjusted to compensate, further diluting founders and unprotected shareholders. Down rounds can dramatically reshape a cap table.

There is no universal answer, but equal splits between co-founders who join at the same time and contribute equally are common. If one founder started earlier, contributed IP, or is the CEO, they often take a larger share (e.g., 60/40 or 50/30/20). The key is to have the conversation early, document it, and include vesting schedules (typically 4-year with 1-year cliff) for all founders.