Sabaki Guide
Cap Table Scenario Modeling Before A Fundraise
How founders and investors use cap table scenarios to understand dilution, option pools, SAFEs, notes, and financing outcomes.
Cap table scenario modeling is the process of testing how financing terms change ownership before a round is signed. It helps founders and investors understand dilution, option-pool changes, SAFEs, notes, valuation, and post-round ownership.
Key Takeaways
- Scenario modeling should happen before term-sheet pressure makes changes harder.
- The useful output is not only a percentage table; it is a plain-language explanation of ownership impact.
- Different instruments such as SAFEs, notes, priced rounds, and option pools need to be modeled together.
How To Model A Fundraising Scenario
- Start with the current cap tableConfirm founder, investor, employee pool, SAFE, note, and option ownership before modeling new terms.
- Enter the proposed financing termsAdd valuation, raise amount, conversion mechanics, option-pool changes, and any side-letter effects.
- Compare pre-round and post-round ownershipShow how each stakeholder group changes after the financing.
- Stress-test alternate termsModel lower valuation, larger pool, smaller raise, and different conversion assumptions.
- Summarise the tradeoffsTranslate the scenario into founder dilution, investor ownership, pool sufficiency, and negotiation risks.
Quick Comparison
| Variable | Why It Matters | Common Risk |
|---|---|---|
| Valuation | Sets investor ownership for the new money | Headline valuation hides dilution from pool changes |
| Raise size | Determines runway and dilution | Raising too little forces another round too soon |
| Option pool | Supports hiring plan | Pool expansion can dilute founders before the round |
| SAFEs and notes | Convert into round ownership | Old instruments surprise the post-round cap table |
| Pro rata | Affects existing investor participation | Unmodeled pro rata changes allocation |
Frequently Asked Questions
What is cap table scenario modeling?
Cap table scenario modeling shows how proposed financing terms change ownership before a deal closes. It helps teams understand dilution, new investor ownership, option pools, and instrument conversion.
When should founders model dilution?
Founders should model dilution before agreeing to valuation, raise size, option-pool changes, or SAFE and note conversion terms. Waiting until legal drafting usually reduces negotiating flexibility.
What inputs are needed for cap table modeling?
The core inputs are the current cap table, outstanding options, SAFEs, notes, proposed valuation, raise size, option-pool target, and any investor participation rights.
Why do option pools matter in a financing scenario?
Option pools often expand before a priced round and can dilute founders and existing holders. Modeling the pool shows the actual ownership effect, not just the headline valuation.