Build a cap table round by round. Watch founder ownership compress as preferred stock and options pool refreshes stack up. Then run an exit waterfall at any sale price to see who gets what — including the difference between 1× non-participating preferred and 2× participating preferred, the term that decides who actually wins on a soft exit.
Each bar shows the cap table at one milestone: at inception, after Series A, after Series B, after Series C. Watch the founders' slice compress.
Shares outstanding and ownership % after each round closes. Options pool refreshes are pre-money, so the pool dilutes the founders, not the new investor.
Rows = exit valuation. Columns = preferred stock structure. Watch what happens to the founders on a soft exit when investors hold participating preferred — a single term flip can be the difference between a million-dollar founder paycheck and zero.
The cap table. Each round prices new shares off the pre-money valuation, so price-per-share = pre-money ÷ existing shares. New investor shares = investment ÷ price-per-share. Options pool refreshes are pre-money — meaning the pool is created from existing founder/employee shares, not from the new money — so pool refreshes always dilute the founders, never the incoming investor. This is one of the most-negotiated terms at every round.
1× non-participating preferred (the modern default). At exit, preferred holders get the greater of: (a) their liquidation preference (typically 1× their investment, paid before common), or (b) what they'd get if they converted to common and took their pro-rata share. They can't have both. On any "good" exit (well above 1× invested), preferred always converts. On a "bad" exit (below their investment), preferred takes the preference and common gets nothing.
Participating preferred ("double-dip"). Preferred gets the liquidation preference plus their pro-rata share of remaining proceeds as common. The double-dip makes the math much worse for founders on soft exits. It's why founders fight participating preferred so hard — and why investors with leverage push for it. The sensitivity grid above lets you see the difference at any exit value.
2× preference and beyond. Some down-round terms flip to 2× or 3× preferences. At a 2× preference, investors get back twice their money before common sees a dollar. At a stressed exit, this is decisive. If you've ever wondered why a "$300M exit" announced in TechCrunch yielded almost nothing for the founder, the answer is usually somewhere in this calculator.
What's not modeled. Anti-dilution (broad-based weighted-average is the modern norm — protects investors only on price decreases, dilutes founders modestly), pay-to-play, drag-along, ESOP vesting and terminations, secondary stock sales, transaction expenses, escrows. This calc is the simplified mechanics — the four or five terms that actually move 90% of the math. See the disclaimer.
This calculator is built for understanding the structure, not for closing a round. Real term sheets carry a dozen interlocking provisions. If you're staring at a real one, run it past someone who has closed a few — or send me a redacted copy and I'll point at what to push back on.
→ Email [email protected]Nothing on this page is investment, legal, or tax advice. Simplified mechanics for educational purposes. See the full disclaimer.