Fully diluted, always
A cap table lists who owns what. The only comparable basis is fully diluted: issued shares, options granted, options reserved but ungranted, warrants, and convertible instruments as if converted.
The option pool shuffle
Most term sheets require a pool top-up before the round closes. Placed pre-money, existing shareholders absorb the entire dilution. Placed post-money, it is shared with the new investor. On a $15m raise, that placement can be worth several points of founder ownership.
Practical hygiene
- One authoritative cap table, kept current
- Every issuance board-approved and documented
- Model each scenario fully diluted before agreeing to anything
Key takeaways
- Always reason in fully diluted terms
- The option pool is dilution — the question is whose