Modelling the cap table across rounds

1. The core idea#

Your cap table today is a snapshot. What matters is where it will be after the next two or three rounds, because that decides how much of the company the founders will own at exit, how big the option pool can be, and whether the next investor can get the stake they need. A simple model, built once and updated before every financing, lets you see those consequences before you sign a term sheet rather than after.

The model does not need to be clever. It needs to get four things right:

• Fully diluted shares: everything that is or could become a share, including all options granted and unallocated, and all SAFEs or convertible notes as if converted.
• How convertibles convert: pre-money or post-money SAFEs, caps and discounts, and which pool increase they share in.
• The pool top-up: investors usually require the option pool to be enlarged before their money comes in (the "pre-money pool"), which means existing holders, mostly founders, bear that dilution.
• The order of events: a bridge before a round converts at that round; a pool top-up at the round dilutes the SAFE holders differently depending on the SAFE's terms.

Who this is for: a founder before a pre-seed, seed or Series A who wants to understand the dilution in a term sheet, or who is deciding between raising more now and less later.

The rule of thumb: model every scenario in fully diluted terms, model the pool top-up explicitly, and look at founder ownership two rounds ahead, not just after this round. Related: 4.08 (setting up the cap table and choosing a tool), 5.01 (sizing the ESOP pool), 5.03 (pool top-ups and who absorbs the dilution), 3.05 (splitting founder equity), 5.20 (founder secondary sales).

2. What the data says (November 2026)#

Dilution per round is falling#

Carta's data on US startups shows each round costing founders less than a few years ago:

Across seed to Series C, median dilution fell from about 19% two years earlier to about 16% in 2025, with the biggest drop at Series B (from about 15% to 12.9%). Carta's Q3 2026 report (5 November 2026) says median dilution has continued to fall at every stage, valuations are higher than in 2025 at every stage, and hardware startups raise larger rounds at higher valuations than other sectors at seed and Series A.

Founder ownership by stage#

Carta's Founder Ownership Report 2026 (rounds from 2021 to 2025):

• The median founding team holds about 56% of fully diluted equity after seed, and about 36% after Series A.
• In physical industries (which include most deeptech), founders hold a median of 30.5% after Series A, against 37.5% in digital industries.
• The median employee pool is 12.1% at seed; by Series C the pool (16.8%) is larger than founder ownership (16.1%).

Bridges are common#

About 29% of all seed and Series A deals on Carta in 2025 were bridge rounds, falling to 26% at Series B. Bridges usually take the form of SAFEs or notes that convert at the next priced round, and are a common reason real founder ownership ends up below a clean model.

What this means for a deeptech founder#

• Deeptech founders typically end up with less after Series A than software founders, because they raise more capital before revenue.
• Per-round dilution of 15–20% is a reasonable planning assumption at seed and Series A; model 25% as a downside.
• Plan for at least one bridge in a deeptech model. The data says roughly a quarter to a third of early rounds are bridges.
• The option pool is the other big lever. A pre-money top-up from 10% to 15% at Series A can cost founders several percentage points, which is why it belongs in the model (5.03).

3. How to do it: building the model#

Step 1. Start from the real cap table#

Export your current cap table from your cap-table tool (4.08) or build it from the share register: every class of share, every option granted, the unallocated pool, and every SAFE, note or convertible instrument with its cap, discount and type.

Step 2. Set up one row per holder group, one column per event#

Keep it simple: founders, option pool (granted plus unallocated), each SAFE or note series, each priced-round investor group. Add a column for each future event: next round, bridge, following round. Each column shows shares and percentage on a fully diluted basis.

Step 3. Model each convertible correctly#

• Post-money SAFE (the current YC standard): the holder gets a fixed percentage equal to the investment divided by the post-money cap, measured on the capitalisation just before the priced round. The pool increase made at that round generally does not count, so SAFE holders are diluted by the top-up along with founders.
• Pre-money SAFE or convertible note: converts at the cap or discount price per share; the holder's percentage depends on how many other SAFEs convert. Stacked premoney SAFEs dilute each other and the founders in ways that are easy to underestimate.
• Indian CCPS or convertible notes: convert on the terms in the shareholders' agreement, usually a price linked to the next round with a floor and a cap (section 4).

Step 4. Model the pool top-up explicitly#

Ask each lead investor what post-money pool they expect (often 10–15% at seed, 12–20% at Series A). If the top-up happens before their money (pre-money), solve for the new pool shares so that the pool equals the target percentage after the round. A spreadsheet

can do this with a small algebra step or goal-seek.

Step 5. Run three scenarios#

• Base: your planned round sizes and valuations.
• Downside: a lower valuation, a larger pool, and a bridge before the next priced round. Upside: a higher valuation or a smaller raise.

Compare founder ownership after the second round ahead in each scenario. That number, not this round's dilution, is what tells you whether a term sheet is acceptable.

Step 6. Add an exit waterfall when you have preferred shares#

Once you have preference shares, add a simple waterfall: at several exit values, how much goes to preference holders first, and how much is left for common shareholders and option holders. Most early-stage preferences are 1x non-participating, so the waterfall only matters at low exits, but it matters a lot there.

Step 7. Reconcile after every closing#

After each round closes, replace the model's estimates with the actual share counts from the closing documents and your cap-table tool. Small errors compound.

Worked example#

Two founders of a power-electronics startup start with 9,000,000 shares and a 1,000,000share pool (10%). They plan a pre-seed SAFE, a priced seed and a Series A. Figures computed in a short script; percentages are fully diluted.

Seed price per share works out at about $1.30 and Series A at about $3.88. The seed pool top-up adds about 840,000 shares; the Series A top-up adds about 1,180,000.

Two sensitivities the founders test:

What they learn. The negotiation over pre- or post-money pool is worth less than a point here; avoiding a bridge, or raising the bridge at a higher cap, is worth several. And even this clean path leaves them at about 45% after Series A, above the Carta median for physical-industry founders (30.5%), which tells them that one more round or one bridge will bring them close to the median.

4. Country notes#

India#

• There is no legal "SAFE" in India. Instruments marketed as SAFEs (such as the iSAFE) are usually compulsorily convertible preference shares (CCPS) with conversion terms written to mimic a SAFE. Model them as CCPS that convert on the stated formula.
• Convertible notes are available to DPIIT-recognised startups: a single tranche of at least ₹25 lakh, convertible or repayable within 10 years, under the deposit rules and, for foreign investors, FEMA.
• Foreign investment pricing. When a non-resident subscribes to CCPS or notes, FEMA pricing rules require that the conversion price or formula be fixed upfront and that the price not be below fair value at the time of issue. Your model's conversion
• assumptions must match the documents filed with the RBI (4.19).
• Valuation at each issue. Each allotment needs a valuation report (registered valuer under the Companies Act; for foreign investors, a valuation under FEMA pricing rules). Model the valuations you can actually support.
• Fully diluted in Indian documents usually includes all CCPS on an as-converted basis and the full ESOP pool. Check the shareholders' agreement definition, because antidilution and pre-emption rights are measured on it (4.06).

United States#

• Post-money SAFEs (Y Combinator standard) are the default at pre-seed. Model each one as a fixed percentage at conversion, and remember that several post-money SAFEs simply add up: two 7% SAFEs mean founders give up 14% before the priced round.
• Pre-money SAFEs and notes require a share-price calculation and are harder to model; ask for the investor's conversion spreadsheet and check it.
• QSBS. If you are relying on the qualified small business stock exclusion (5.08, 5.20), track when the company's gross assets cross the statutory limit; shares issued after that are not eligible. Note this in the model as a date, not a percentage.
• 409A after a priced round. A new round usually triggers a new 409A valuation and a higher strike price for future grants (5.07); the model's pool sizing should reflect that later grants cost more per share.

United Kingdom#

• SEIS and EIS relief for UK investors does not work with a US-style SAFE. UK founders use an advance subscription agreement (ASA), which HMRC accepts if it meets conditions such as a long-stop date (HMRC guidance points to no more than six months), no interest, no refund and no variation. Model ASAs as converting at the next round or the long-stop.
• Pre-emption rights in UK articles and the Companies Act give existing shareholders the right to take up new shares pro rata unless disapplied. Model whether existing investors will take up their allocation.
• EMI options count in fully diluted share capital like any other option; investors will include the full EMI pool.

Tools#

Cap-table software (Carta, Pulley, Qapita, Eqvista, Trica and others) can model rounds and SAFEs, but a simple spreadsheet you understand is better for testing scenarios. Reconcile the two after each closing (4.08).

5. Scripts, mistakes and sources#

Scripts#

Asking a lead investor about the pool

"Before we agree the price, can you tell me the post-money pool you're assuming and whether it's pre- or post-money? I'd like to model it so we're comparing the same numbers."

Pushing back on an oversized pool

"Here's our hiring plan for the next 18 months and the grants it needs. It comes to about 9% of the company. We're happy to have a 12% post-money pool, which covers that plan with a buffer, but 18% would leave us paying for options we won't grant before the next round."

Explaining dilution to a co-founder

"After this seed we'll own about 59% between us. If the Series A goes as planned we'll be around 45%, and if we need a bridge first, about 41%. That's still in line with what founders at our stage typically hold, but it's why I'd rather raise a bit more now than bridge later."

Common mistakes#

1. Modelling on issued shares instead of fully diluted. Investors always use fully diluted.
2. Forgetting the pool top-up, or assuming it is post-money when the term sheet says pre-money.
3. Stacking SAFEs without adding them up. Each one looks small; together they can cost more than the priced round.
4. Modelling only this round. Founder ownership two rounds ahead is the number that matters.
5. No bridge scenario. About a quarter to a third of early rounds are bridges.
6. Indian CCPS modelled like US SAFEs. The conversion formula in the documents, and FEMA pricing rules, decide the outcome.
7. Never reconciling the model with the real cap table. Small errors compound over rounds.

Related playbooks#

• 4.08 Setting up the cap table and choosing a tool
• 4.06 Shareholder agreement basics
• 3.05 Frameworks for splitting founder equity
• 5.01 Sizing the ESOP pool at each stage
• 5.03 Pool top-ups and who absorbs the dilution
• 5.07 Setting the strike price
• 5.20 Founder secondary sales
• 4.19 FEMA, FDI and ODI rules for foreign money

Sources#

• Carta, VC startup fundraising benchmarks from 1,000 rounds (July 2026) and Real VC round benchmarks, seed through Series B (April 2026)
• Carta, State of Private Markets: 2025 in review (February 2026) and State of Private Markets: Q3 2026 (5 November 2026)
• Carta, Founder Ownership Report 2026
• Y Combinator, post-money SAFE user guide
• HMRC guidance on advance subscription agreements for SEIS and EIS
• Worked example computed with a short Python script (available on request)

This playbook is general information, not legal, tax or investment advice. Have your model checked against the actual financing documents before you sign.