Cap Table Changes over Time and Founder Dilution (Excel Worksheet Included)

I recently got some questions from first-time founders on dilution, what is a typical A round, what does a typical cap table look like (not the format, but the progression over time).

My answer is always the same: It depends. Here’s an Excel worksheet that lets you play around with different round sizes and investors:

You can play around with different rounds, ownerships, follow-on investments, etc.:

  • What reserves would you expect for your Series A investors if you count on their pro-rata participation in the next round?
  • What is the dilution for an investor if they don’t do any follow-on investments?
  • Depending on some unfortunate capital planning and future round sizes, is there a maximum for valuation × ownership, after which some investors could have less and less appetite to continue the journey?
  • How do voting or power configurations on the board and off the board change?
  • Do the founders have equal monetary motivation?
  • What if one founder leaves or is kicked out? How would the balance change?
  • What if you need to hire a new CEO and hive her 5-7% ownership?

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