VC & PE Glossary
What Is Cap Table Scenario?
Updated
Definition
A cap table scenario is a modeled view of future ownership and proceeds after a hypothetical event — such as a new financing round, option pool increase, or exit at a given price.
Useful for: Founders, Investors
A cap table scenario is a forward-looking model showing how ownership and exit proceeds change under assumed financing or sale terms.
How it works
Start from the current fully diluted cap table. Layer assumptions:
- New money at a pre-money valuation and option pool target
- Conversion of all notes and SAFEs with caps and discounts
- New hire grants from an expanded pool
- Exit price ranges with liquidation preference waterfalls
Output tables show founder percentages post-close and dollar proceeds per shareholder at each exit level. Scenarios often include a pool shuffle — increasing the option pool pre-money, which dilutes existing holders before new investors enter.
Investors send scenario spreadsheets with term sheets; founders should edit assumptions and stress-test down exits, not just the base case.
Include sensitivity on option pool expansion and note conversion caps — small changes in pre-money or pool size can shift founder ownership several points at close. Running three scenarios (base, conservative, aggressive) is standard board prep before signing.
Why it matters
- Founders: Understand whether a flat round with a bigger pool hurts more than a down round with a smaller pool. Scenarios make tradeoffs visible.
- Investors: Confirm returns at sub-unicorn exits — many funds need the math to work at $200M–$500M outcomes, not only at billion-dollar dreams.
Common mistake
Modeling only ownership percentages and ignoring liquidation stack order. You can own 15% economically on paper yet receive little in a modest acquisition.
Related ideas
See also cap table, pro forma cap table, liquidation waterfall, and cap table risk.
Related terms
- Cap Table — A cap table (capitalization table) is the record of who owns equity in a company — shares, options, warrants, and convertible instruments — and how ownership percentages change after each financing.
Last updated:
Editorial note: AI tools assisted with research, structure, or drafting. Venture Capital Tracker retains human editorial responsibility for factual accuracy, relevance, and source quality before publication.
Common questions
Short answers for founders, LPs, and operators