Ownership math, in plain English.
Ownership %
Each stakeholder's % of total fully-diluted shares. Founders, option pool, investors all calculated against the same total.
Dilution by round
Every priced round adds new shares, diluting existing holders. Pre-money valuation determines how much.
Option Pool
Reserved shares for future employees. Standard 10-20% pre-Series A. Top-up at each round expected by lead.
Fully diluted vs outstanding
FD includes options + warrants + convertibles + safes. Outstanding only counts issued. Always compare on FD.
Exit waterfall
On exit, liquidation preferences pay out first (1x, 2x, etc.), then participation rights, then common shares last.
SAFEs + notes convert
Pre-priced capital (SAFE, convertible notes) converts at next priced round per discount + cap terms. Affects dilution.
A clean handoff, in 4 steps.
Identify all shareholders
Founders, employees with options, investors with preferred, SAFEs/notes outstanding.
Calculate fully-diluted base
Total = common + preferred + options (vested+unvested) + warrants + SAFE/note conversion shares at expected cap.
Run round-by-round dilution
Each round adds new shares, computed from pre-money valuation + raise amount. Existing holders dilute proportionally.
Model exit waterfall
At each potential exit price, calculate who gets what given liquidation preferences and participation rights.
One-time, or part of your BOS.
- Founder + employee tracking
- Up to 3 financing rounds
- Simple waterfall calculator
- Step-by-step instructions
- Pro upgrade later
- Unlimited rounds
- SAFE + note tracking
- Pre-conversion modeling
- Exit waterfall by scenario
- 409A integration
- Investor-ready exports
Common questions.
What is a cap table?
A cap table (capitalization table) is the record of who owns your company, founders, investors, and the option pool, along with how much and on what terms, so you always know the ownership picture. Investors and acquirers scrutinize it, so keeping it accurate is essential. We keep your cap table organized so it is always investor-ready.
Why does an accurate cap table matter?
Because financings, acquisitions, and your own planning all depend on knowing exactly who owns what, and errors surface at the worst time, during due diligence, and can delay or derail a deal. We keep your records clean so a raise or sale is not held up by cap-table cleanup.
What does a cap table track?
Every shareholder and their shares, all option grants and their vesting, the option pool and what remains, convertible instruments like SAFEs and notes, and fully diluted ownership, so you see both current and potential ownership. We keep these organized so your cap table stays accurate.
How do SAFEs and notes affect the cap table?
What is the option pool?
The option pool is equity reserved for future hires, and it sits on the fully diluted cap table, so tracking what is granted versus what remains is essential for planning grants and modeling dilution. We keep the pool and grants organized so you always know how much room you have. See option pool sizing.
What happens if my cap table has errors?
Errors, an unrecorded grant, a wrong vesting date, a miscounted pool, can stall a financing or acquisition during diligence, and fixing them retroactively is painful. We keep your cap table accurate from the start so diligence is smooth rather than a scramble. See due diligence.
What is fully diluted ownership?
Fully diluted ownership counts all shares as if every option, SAFE, and note had converted, giving the true picture of who will own what, which is how investors evaluate a company. We keep your cap table organized on a fully diluted basis so you and investors see real ownership, not just issued shares.
Do I need cap table software?
Many startups eventually use dedicated software, but the foundation is accurate records and disciplined tracking of every grant and change, which matters whatever tool you use. We keep your ownership records organized so whatever system you adopt starts from clean data.
Can File.Business keep my cap table accurate?
Yes: we form the corporation, set up the cap table, and keep grants, vesting, the option pool, and convertible instruments organized, so your ownership records stay investor-ready and a future raise or sale is not delayed by cleanup.