Price round math is the set of calculations that translate term sheet economics into a pro forma cap table for a priced equity financing.

How it works

Start with pre-money fully diluted shares—all common, preferred, options, warrants, and converting instruments. If the pool expands pre-money, increase share count before calculating price per share. Divide pre-money valuation by shares to get price; divide investment by price for new investor shares. Post-money shares equal pre-money plus new issuance; ownership is each holder’s shares divided by post-money total.

Convert SAFEs and notes at their caps and discounts. Reconcile with legal’s closing checklist—small rounding differences cause closing delays if not caught early.

Why it matters

• Founders: Run math before accepting term sheets; negotiate pool size with full dilution visibility.
• Investors: Verify pro-rata investment amounts and resulting ownership match fund model assumptions.

Common mistake

Calculating post-money ownership using pre-money share count without pool increase or SAFE conversion—everyone’s percentages shift at closing.

Related ideas

See post-money valuation, option pool shuffle, and cap table scenario.