Founder Fuel: How to Create a Cap Table for Your Priced Round (Step-by-Step Video Tutorial)
Understanding your capitalization table (“cap table”) is one of the most important skills a founder can develop when raising capital. Too often, founders rely entirely on platforms like Carta to manage ownership without fully grasping the math that drives valuation, dilution, and investor ownership. This can create costly mistakes during negotiations with investors.
Marion Street Capital believes every founder should know how to build a cap table from scratch and verify how ownership is allocated in both pre-money and post-money scenarios. That’s why we created this step-by-step video tutorial to guide you through creating a cap table for a priced seed round.
What This Tutorial Covers
In this tutorial, Andres Guevara of Marion Street Capital walks through how to model a clean, pro-forma cap table for a SaaS company raising a priced seed round. Using simple but realistic assumptions, the tutorial shows:
How to calculate pre-money and post-money valuation (example: $500K ARR × 10× EV/Sales = $5M pre-money; adding $1M raise = $6M post-money).
How to size investor ownership correctly ($1M ÷ $6M post-money = 16.7% equity).
How to account for an employee option pool (15% post-money, unallocated until granted).
Why outstanding vs. fully diluted shares matter when forecasting dilution.
Common mistakes to avoid, like using pre-money instead of post-money math or building circular references in Excel.
The video also explains why founders must understand the assumptions behind their cap tables before inputting them into software like Carta: garbage in, garbage out.
Why Cap Tables Matter
A cap table is not just a compliance document — it’s the foundation of your company’s ownership, control, and economic future.
It determines how much equity each founder retains after fundraising.
It clarifies investor economics in a priced round.
It ensures employees are incentivized through an option pool without unintentional founder over-dilution.
It gives founders the ability to negotiate confidently with venture capital and angel investors.
Founders who understand their cap tables avoid surprises, protect their ownership, and can plan intelligently for future rounds, exits, or IPOs.
Key Terms in This Tutorial
Pre-Money Valuation – The value of the company before new investment.
Post-Money Valuation – Pre-money + new investment.
Outstanding Shares – Shares already issued to founders and investors.
Fully Diluted Shares – Shares outstanding plus all authorized but unissued options, warrants, or convertibles.
Option Pool – Equity set aside (often 10–20%) to hire and retain employees.
Dilution – Reduction in ownership percentage as new shares are issued.
Who Should Watch This Video
Startup founders raising their first priced seed round.
Finance leads, CFOs, and controllers managing SaaS or tech companies.
Investors and advisors seeking to educate portfolio companies.
Entrepreneurs across the United States, North America, and Europe navigating early-stage venture capital.
Frequently Asked Questions About Cap Tables
Q1: What is a cap table and why is it important for startups?
A capitalization table (“cap table”) is the record of who owns what in a company. It shows founders, investors, and employees’ equity stakes, both outstanding and fully diluted. It matters because it drives ownership, control, and valuation — and determines how much equity you keep after fundraising.
Q2: How do you calculate post-money valuation?
Post-money valuation = Pre-money valuation + New Investment.
Example: if your SaaS startup has $500K ARR and you apply a 10× EV/Sales multiple, that’s a $5M pre-money valuation. If you raise $1M, the post-money valuation is $6M.
Q3: What’s the difference between outstanding shares and fully diluted shares?
Outstanding shares are already issued to founders and investors.
Fully diluted shares include all outstanding shares plus authorized but unissued options, warrants, or convertible securities. This matters when forecasting dilution.
Q4: Why do investors push for an option pool before closing a round?
Investors want to ensure the company can hire talent without issuing new shares that dilute their ownership later. By creating a 15% option pool post-money, dilution is shared between founders and existing shareholders.
Q5: Why shouldn’t I just trust Carta (or other software) for my cap table?
Carta and similar platforms are excellent for recordkeeping, but they don’t replace financial literacy. If you input the wrong assumptions, you’ll get misleading outputs. Garbage in = garbage out. Founders must understand the math to negotiate confidently and avoid costly mistakes.
Q6: How much equity do founders usually retain after a seed round?
It varies by deal, but with a $1M raise on a $5M pre-money valuation (post-money $6M), founders typically retain about 68–70% fully diluted ownership after accounting for a 15% option pool.
Q7: What’s the difference between a priced round and a SAFE or convertible note?
Priced round: Investors buy equity at an agreed valuation (straightforward dilution math).
SAFE / convertible note: Investment converts into equity later, usually at a discount or valuation cap. More complex modeling is needed to forecast dilution.