Cap Table and Model Dilution

How do I read a cap table and model dilution?

A cap table lists who owns what (founders, employees, investors) and how ownership changes with financings and option grants. To sanity‑check a deal:
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● Baseline: current fully diluted ownership (including the option pool).
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● Pro forma: show your investment, any pool refresh required by the round, and post‑money ownership by class.

● Waterfall: in an exit, the liquidation preference stack and participation terms determine payouts.


Common pitfalls: ignoring a pre‑ or post‑money option pool refresh, which dilutes existing holders; not modeling all outstanding convertibles; or misreading post‑money SAFE percentages. Ask for a one‑page pro‑forma cap table and confirm the pool math and your information rights.

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