Build a Startup Cap Table That Models SAFEs and Dilution

Give each security its own column and each holder its own row. At minimum, track these items:

• Common shares held by each founder, with vesting start date and vesting schedule.
• The option pool: granted, exercised, canceled and still available.
• Each SAFE or convertible note, with the investment amount, valuation cap, discount and whether it's pre-money or post-money.
• Preferred shares from each priced round, with price per share and liquidation preference.
• A fully diluted total that includes granted options, the unissued pool and any convertible securities that will convert in the next round.

Keep the inputs (amounts, caps, share counts) in one clearly marked area and make everything else a formula. When you later show the sheet to an investor or lawyer, they should be able to change one input and watch the rest update.

A post-money SAFE gives the investor a fixed percentage of the company, measured after the SAFE converts, equal to the investment divided by the valuation cap. The percentage includes the option pool and other converting SAFEs, which is why it's easiest to solve for the new shares directly.

For example, say two founders hold 9,000,000 shares and the company has a 1,000,000-share pool, so there are 10,000,000 shares before the SAFE. Say an investor puts in 1,000,000 on a post-money cap of 8,000,000. Say that's 12.5 percent ownership after conversion, so the SAFE shares X must satisfy X equals 0.125 times (10,000,000 + X), which gives about 1,428,571 shares. In this example, total shares are now 11,428,571, and the founders own 78.75 percent, the pool 8.75 percent and the SAFE holder 12.5 percent.

If you have several post-money SAFEs, the solve gets circular. Use your spreadsheet's iterative calculation or the algebra for a system of equations, and check that each holder's percentage equals investment divided by cap. The post-money SAFE conversion calculator is a good cross-check.

Add a new block for the priced round and build it in this order:

1. Enter the investment amount and the percentage the new investors will own after closing.
2. Solve for new shares: new shares = percentage x existing shares / (1 minus percentage).
3. Add any option pool increase the investors require before they invest, and note whether it counts in the pre-money.
4. Compute price per share as the investment divided by new shares.
5. Recompute every holder's ownership as their shares divided by the new fully diluted total.

Continuing the example, say new investors buy 20 percent of the post-round company. New shares are 0.2 x 11,428,571 / 0.8, about 2,857,143, for a total of 14,285,714 shares. Say the founders' 9,000,000 shares are now 63 percent, SAFE holders own 10 percent, the pool is 7 percent and the new investors hold 20 percent. Notice that in this example the founders went from 90 percent to 63 percent across two events, and the SAFE holder's stake shrank from 12.5 to 10 percent even though nobody sold anything.

Investors usually want the pool sized for the next 12 to 24 months of hiring, and they typically want it created before their money comes in, so it dilutes existing holders rather than them. That's the so-called option pool shuffle, and it lowers your effective pre-money valuation even when the headline number looks unchanged.

Model it explicitly. Add a line for the pool top-up in the priced round, show the pool as a percentage of the post-round fully diluted count, and compare your ownership with and without the top-up. For sizing ideas, see the option pool benchmark for seed and Series A.

Track granted and unissued options separately. Only granted options belong in an employee's ownership figure, while the unissued pool is capacity that hasn't been offered to anyone yet.

A spreadsheet is fine until it isn't. Signs you've outgrown it: more than a handful of employees hold options, you need to issue and track exercises, you have several convertible instruments at different caps, or an investor asks for a 409A or board consent packet built from the cap table.

At that point a cap table platform such as Carta or Pulley keeps a single record of securities, ties issuances to board approvals and produces reports on demand. The move is easier if your spreadsheet has clean inputs, so read how to move a cap table from a spreadsheet to Carta and compare providers in Carta vs Shareworks vs Pulley before you commit. Whichever you choose, keep your lawyer's records as the source of truth for legal ownership, and reconcile the tool to them.