Cap table (capitalization table) math is essential for understanding ownership, dilution, and investor returns across multiple funding rounds. Every round dilutes existing shareholders. Understanding this prevents founders from being surprised when their ownership shrinks.
Post-Money Valuation
Post-Money = Pre-Money + Investment Amount
Investor Ownership
Investor % = Investment / Post-Money Valuation
Dilution
New Founder % = Old Founder % × (1 - New Investor %)
Key Takeaways
- Each round dilutes everyone proportionally.
- Founders typically retain 20-30% after Series A.
- ESOP pool (10-15%) dilutes founders too.
- Higher valuation = less dilution. Prove value before raising.