Pro forma cap table: how to model your equity before you raise

A pro forma cap table is your cap table as it will look after a deal closes, built before you sign anything. It turns a term sheet’s headline numbers (raise amount, pre-money valuation, pool size) into the figure most founders care about: what you’ll own when the dust settles.

Most founders see their post-round ownership for the first time on the closing documents their lawyer sends over. By then the terms are agreed. A pro forma moves that moment earlier, to when you can still negotiate.

This post covers how to build one, with a worked example you can copy. If you want the bigger picture of how ownership moves from founding through Series B, the founder’s guide to dilution covers that arc. This one is about the spreadsheet for a single round.

What “pro forma” means here

“Pro forma” is accounting shorthand for “as if.” A pro forma cap table shows ownership as if a transaction had already happened: a priced round, a SAFE converting, a new option pool, a big hire’s grant.

Your current cap table answers “who owns what today?” The pro forma answers “who owns what after this specific deal?” You can build as many as you like, one per scenario, and compare them side by side.

That comparison is where the value is. A term sheet with a higher valuation can still leave you owning less, once you account for a bigger pool or a SAFE with a low cap. You only see that by running the numbers.

What goes into the model

Before you open a spreadsheet, gather these. Each one moves the result.

Input	Where it comes from	Why it matters
Current share count by holder	Your current cap table	The starting point everything dilutes from
Option pool (granted and unissued)	Board approvals, equity plan	Counts in fully diluted shares
SAFEs and convertible notes	Each signed instrument	Amount, cap, discount, and SAFE type (pre- or post-money)
Pre-money valuation	Term sheet	Sets the price per share
Raise amount	Term sheet	Sets how many new shares get issued
Target pool size after the round	Term sheet (usually a post-money %)	Drives the option pool shuffle

Work in fully diluted shares: issued shares, plus every granted option, plus the unissued pool, plus anything that will convert. Investors usually price rounds on a fully diluted basis, so your model should match how they count. Where an instrument defines its own share count (a SAFE does), use that document’s definition.

A worked example

Here’s a simple seed round with one wrinkle at a time. Two founders, a small existing pool, one SAFE, then a priced round.

Starting point:

• Founder A: 4,500,000 shares
• Founder B: 4,500,000 shares
• Option pool: 1,000,000 shares (granted plus unissued)
• Fully diluted total: 10,000,000

The SAFE: $500,000 on a post-money SAFE with a $5M valuation cap.

The round: $2M raised at an $8M pre-money valuation.

Step 1: convert the SAFE

A post-money SAFE gives its holder a fixed percentage: the investment divided by the post-money cap. Here that’s $500K ÷ $5M = 10% of the company’s capitalization at conversion, counting the SAFE’s own shares.

To get 10% of the total including itself, the SAFE converts into 1,111,111 shares (1,111,111 ÷ 11,111,111 = 10%). That works out to a conversion price of $0.45 per share.

If you have several post-money SAFEs, each keeps its own percentage (amount ÷ cap), so additional SAFEs dilute you rather than each other. Model them together anyway, because their share counts are all solved against one shared total. Our SAFE notes guide covers the pre-money versus post-money difference, which changes this step considerably.

Step 2: price the round

This example uses the common convention where the SAFE converts as part of the pre-money, so the pre-money fully diluted count includes it: 11,111,111 shares. Some deals negotiate SAFEs out of the pre-money instead, which changes the price and the investor’s final percentage, so check what your term sheet says.

Price per share = pre-money valuation ÷ pre-money fully diluted shares = $8,000,000 ÷ 11,111,111 = $0.72.

New investor shares = $2,000,000 ÷ $0.72 = 2,777,778.

Step 3: build the table

Holder	Shares	Ownership after round
Founder A	4,500,000	32.4%
Founder B	4,500,000	32.4%
Option pool	1,000,000	7.2%
SAFE holder	1,111,111	8.0%
Seed investor	2,777,778	20.0%
Total	13,888,889	100%

Post-money valuation is $10M ($8M pre plus $2M raised), and the investor owns $2M ÷ $10M = 20%. That cross-check is worth running. When the SAFE converts in the pre-money, as it does here, the investor percentage should equal raise ÷ post-money. If it doesn’t, something upstream is off.

Notice the SAFE holder ended at 8%, not 10%. The SAFE fixed its percentage at conversion, before the new money came in, so the priced round diluted it along with everyone else.

Step 4: add the option pool shuffle

Now the realistic version. The investor’s term sheet says the option pool must be 12% of the company after the round, and it has to be created before their money goes in. That’s the option pool shuffle, and it’s where pro forma models earn their keep.

To keep the math readable, treat the whole 1,000,000-share pool as counting toward that 12%. (Many term sheets specify the unissued pool, which means a bigger top-up if some options are already granted.) So the pool has to grow from 1,000,000 shares to 12% of the post-round total. Because the new pool shares sit in the pre-money count, they also lower the price per share, which changes how many shares the investor gets, which changes the total. It’s circular, so either solve it algebraically or let a spreadsheet iterate.

Solving it here: the pool grows by 784,314 shares. The price per share drops to about $0.67. The investor gets 2,973,856 shares and still ends at exactly 20%.

Holder	Without pool increase	With 12% post-money pool
Founder A	32.4%	30.3%
Founder B	32.4%	30.3%
Option pool	7.2%	12.0%
SAFE holder	8.0%	7.5%
Seed investor	20.0%	20.0%

Notice what moved. Each founder lost about two points, and the investor’s number didn’t change.

Here’s another way to see it. Those new pool shares are worth roughly $527,000 at the round price. That value comes out of the existing holders, so the effective pre-money valuation for the people already on the cap table is closer to $7.5M than $8M. The headline valuation and the valuation you actually got are different numbers, and the pool size is the gap.

(One technical note on the SAFE. Under the standard YC post-money SAFE, a pool increase made in connection with the round is generally left out of the capitalization the SAFE converts against, so the SAFE’s share count above doesn’t change and the SAFE holder shares in that dilution. YC’s post-money SAFE user guide explains the reasoning. Check your own documents. Older pre-money SAFEs and custom terms handle this differently, and the difference can be meaningful.)

Scenarios worth running

Once the table works, copy it and change one input at a time. These are the comparisons I’ve found most useful before a raise.

Two term sheets. A $10M pre with a 15% pool against an $8M pre with a 10% pool. The higher number doesn’t always win. Run both and compare founder ownership, not headlines.

Pool size sensitivity. Run 10%, 12%, 15%, and 20%. Then build a hiring plan for the next 18 months and see which pool it actually needs. That plan is your best argument for a smaller pool. The dilution guide walks through why this lever matters as much as valuation.

Raise size. Raising $2.5M instead of $2M at the same valuation costs you real percentage. Sometimes it’s worth it for the runway. The model tells you the price.

The next round. Stack a Series A pro forma on top of the seed one. A 1% grant to a key hire today might be 0.75% after the next round, and they deserve to know that when they’re weighing your offer. Our post on what your shares are actually worth gets into how to talk about that honestly.

Common modeling mistakes

Using issued shares instead of fully diluted. Leaving out the pool or unconverted SAFEs makes your ownership look higher than it is. Investors count fully diluted, so your model should too.

Forgetting interest on convertible notes. Notes usually convert principal plus accrued interest. A $250K note a year and a half old converts as more than $250K.

Treating all SAFEs the same. Pre-money and post-money SAFEs convert very differently, and caps, discounts, MFN clauses, and pro rata side letters all change the result. Model each instrument on its actual terms.

Not checking the totals. Ownership should sum to 100% (give or take rounding), and in a standard round the investor’s share should equal raise ÷ post-money. Two quick checks catch most spreadsheet errors.

Treating the model as the final word. A pro forma is your planning tool. The closing cap table your lawyer prepares is what actually counts, and things like rounding and exact pool definitions can shift it slightly. If yours and theirs differ by more than rounding, ask why before you sign.

Where this fits before a raise

A pro forma models the round. It assumes the starting ownership is right.

For many early teams that’s the shakier assumption. If the founder split was set on day one and never revisited, every scenario you run is diluting a number that may no longer reflect who built the company. It’s worth getting that right first, ideally by tracking contributions through the early stage and then converting to a fixed cap table when you raise. That pre-raise stage is what Equity Matrix is built for.

Then build the pro forma, run the scenarios, and walk into the term sheet conversation already knowing your number.

Frequently asked questions

What is a pro forma cap table? It’s a projection of your cap table after a specific transaction, usually a funding round. It shows each holder’s shares and ownership percentage as if the deal had already closed, including converted SAFEs and notes, new investor shares, and any change to the option pool.

How is a pro forma different from a regular cap table? A regular cap table records current ownership. A pro forma models a future state. You keep one current cap table and build as many pro formas as you have scenarios to compare.

Do SAFEs show up on a pro forma cap table? Yes, and they’re one of the main reasons to build one. SAFEs don’t appear as shares until they convert, so they’re easy to forget. A pro forma converts them at the round so you can see the dilution you’ve already agreed to.

What’s the option pool shuffle? It’s when investors require the option pool to be created or expanded before their money goes in. The new pool shares count in the pre-money, so the dilution falls on existing holders rather than the incoming investor. In the example above, it cost each founder about two points and lowered the effective pre-money from $8M to roughly $7.5M.

Can I build a pro forma in a spreadsheet? Yes, and for a single round a spreadsheet is usually plenty. The pool shuffle makes the math circular, so either solve it algebraically or turn on iterative calculation. Dedicated cap table tools offer scenario modeling once your table gets more complex.