Cap Table Simulator

A cap table (capitalization table) is a spreadsheet or document that shows every shareholder in a company, how many shares they own, what type of shares they hold, and what percentage of the company they own. It matters because it is the legal record of ownership. Errors in the cap table can cause fundraising delays, tax problems, and legal disputes. Every founder should understand their cap table before signing any investment documents.

An option pool is a block of shares reserved for future employee stock grants. Investors typically require founders to create or expand the option pool before a funding round, and this pool comes out of the pre-money valuation — meaning it dilutes existing shareholders (primarily founders) before the new investor buys in. A 10-15% option pool is standard at seed and Series A. The key negotiation point is the size of the pool: larger pools mean more founder dilution.

A startup's cap table typically includes founders, angel investors, venture capital firms, employees with stock options or RSUs, advisors with equity grants, and any holders of convertible instruments (SAFEs or convertible notes) once they convert. Some cap tables also show warrants. At the earliest stage, it may just be the founders. By Series B, a cap table can include dozens of stakeholders across common stock, preferred stock, and option grants.

Common stock is what founders and employees hold. Preferred stock is what investors receive. Preferred stock comes with special rights including liquidation preferences (investors get paid first in an exit), anti-dilution protection, pro-rata rights, board seats, and information rights. In an acquisition, preferred shareholders get their investment back before common shareholders receive anything. This distinction is why a founder with 30% ownership may receive less than 30% of the exit proceeds.