You can already imagine the money hitting the bank. The extended runway, the countless opportunities that lie ahead.
Then you see the final cap table.
"Wait... how did I get diluted by 29%?"
This isn't a rounding error. This is a multi-crore mistake that just came out of your pocket.
You replay everything in your mind. The term sheet clearly stated "25% dilution on a pre-money fully diluted basis with a 15% post-money ESOP reserve."
So what happened?
The hidden math nobody warns you about:
- Those convertible notes from your seed round? They just converted at a valuation cap
- Existing investors had pro-rata rights and some of them exercised that
- The "fully diluted" calculation included unissued ESOP options
- The pre-money valuation wasn't calculated the way you understood it
Each element created a cascade of mathematical effects. You had mentally calculated the dilution impact on your existing cap table, not the fully diluted one.
The worst part? This happens to founders far too often.
It's not that you're not smart. It's that cap table math is deceptively complex and millions can be gained or lost in the fine print of your fundraise.
That's why we built the most complex scenario modeling feature in Tabulate.
It wasn't enough to just track your ownership - you need to visualize the impact of complex terms before signing them.
So whether you're looking to know how note conversions affect your dilution or how stock option pool topups could change your cap table, give our scenario modeller a try.
Your cap table math shouldn't be mysterious. Your ownership is too important to leave to spreadsheet guesswork.
equitydilution captable fundraising
incentiv Indranil Tiwary Ranjit Sundaram Chetan Pasari
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