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.