A startup cap table shows who owns the company, how many shares each person or investor holds, and what percentage of the company belongs to each holder. The table can include founders, angel investors, venture capital firms, employees, advisors, and holders of SAFEs or convertible notes.
A cap table also shows how ownership changes after a new investment. This makes it one of the most important financial records for a startup. Every new share issue can change the percentage held by existing shareholders. A founder may keep the same number of shares after a funding round, yet the founder’s percentage can fall when the company creates new shares for a new investor.
Carta describes the cap table as the main record of a company’s equity structure. A complete cap table can include common shares, preferred shares, options, warrants, SAFEs, and convertible notes. A fully diluted cap table also counts securities that can turn into shares later.
Ownership Before a Funding Round
Before a new round, the company has an existing ownership structure. Consider a simple startup with two founders and an employee option pool.
Founder 1 owns 60% of the company. Founder 2 owns 30%. The employee option pool holds the remaining 10%.
The total ownership equals 100%.
This picture gives a clear view of the company before new capital enters. The important point lies in the total number of shares behind these percentages. A percentage alone does not tell the full story if the company also has SAFEs, convertible notes, warrants, or unallocated employee options.
For that reason, a founder should look at both issued shares and fully diluted shares before a financing round.
Why Fully Diluted Ownership Matters
A company can show one ownership picture through its issued shares and another through its fully diluted shares.
Issued and outstanding shares represent shares that exist today and belong to shareholders. Fully diluted shares add securities that could turn into shares later. These can include employee options, warrants, SAFEs, and convertible notes.
Suppose founders hold 8 million shares and an employee pool contains 2 million shares. The company may show 8 million founder shares against 10 million total shares on one view. Yet a future financing can add shares from SAFEs or other securities.
Investors usually look at the fully diluted figure when they assess a deal. A founder who looks only at issued shares can therefore see a stronger ownership position than the final financing model shows. Carta also recommends a pro forma cap table before a round so that the company can see the expected ownership after the new capital enters.
A Simple Before and After Example
Consider a startup with this ownership before a new round.
Founder 1 owns 60%. Founder 2 owns 30%. The employee option pool owns 10%.
The company then raises a new round. The new investor receives 20% of the company after the round.
The existing shareholders now share the remaining 80%.
Founder 1 therefore moves from 60% to 48%. Founder 2 moves from 30% to 24%. The employee pool moves from 10% to 8%. The new investor receives 20%.
The final table looks like this:
| Holder | Before Round | After Round |
|---|---|---|
| Founder 1 | 60% | 48% |
| Founder 2 | 30% | 24% |
| Employee Option Pool | 10% | 8% |
| New Investor | 0% | 20% |
| Total | 100% | 100% |
The founders did not lose shares from their existing holdings. The company issued new shares to the investor. The total number of shares increased, so the founders’ percentage became smaller.
This process is called dilution.
How the Dilution Formula Works
A simple priced round has a basic formula.
Post-round ownership = Pre-round ownership × (1 − New Investor Ownership)
For Founder 1, the calculation looks like this:
60% × 80% = 48%
For Founder 2:
30% × 80% = 24%
For the employee pool:
10% × 80% = 8%
The new investor receives the remaining 20%.
This formula works for a simple case where the new investor receives a fixed percentage after the round and no other securities or pool changes affect the calculation.
Real startup deals often contain more variables.
Pre-Money and Post-Money Valuation
A funding round normally uses a pre-money valuation and a post-money valuation.
Pre-money valuation means the company’s value before the new investment. Post-money valuation means the value after the new capital enters.
Suppose a startup has a $8 million pre-money valuation and raises $2 million.
The post-money valuation becomes $10 million.
The new investor owns:
$2 million ÷ $10 million = 20%
Existing shareholders therefore hold 80% after the round.
This example looks simple, yet an option pool or outstanding SAFE can change the final result. The exact share count matters more than a simple valuation calculation.
The Employee Option Pool
The employee option pool can have a major effect on founder ownership.
Startups often create an option pool for future employees. The pool gives the company equity that it can offer to important hires. A larger pool can reduce founder ownership before an investor enters the company.
The timing of the pool increase matters.
Suppose an investor wants 20% of the company after a round and also wants a 10% employee option pool. If the company creates that 10% pool before the investment, existing shareholders can carry most of that dilution. The investor can still receive the full 20%.
This structure can produce a lower founder percentage than a structure where the pool increase occurs after the investment.
The difference may look small on paper, yet several percentage points can represent a large amount of future company value. Founders therefore need a pro forma cap table that shows the pool before the round and after the round.
SAFEs Have Become Central to Early Startup Finance
SAFEs now play a major role in early startup finance.
Carta reports that in Q2 2026, 93% of all pre-seed rounds used SAFEs. The figure rose to 95% when measured by capital raised. Convertible notes represented only a small part of pre-seed activity.
The type of SAFE also matters. In Q2 2026, 91% of SAFEs on Carta were post-money SAFEs.
A post-money SAFE gives the investor a clearer expected ownership position at the time of the agreement. A pre-money SAFE can create more uncertainty if the startup signs several SAFEs before the next priced round.
Valuation Caps and SAFE Ownership
A valuation cap sets a maximum company value for the SAFE conversion calculation. A lower cap can give the SAFE investor a larger ownership stake when the SAFE converts.
Carta reports that 94% of post-money SAFEs had valuation caps in the first half of 2026.
For example, a $1 million SAFE with a $5 million valuation cap can convert into a 20% ownership position under a simple post-money example.
The calculation is:
$1 million ÷ $5 million = 20%
The exact result in a real financing can differ when the SAFE contains other terms, such as a discount, or when other securities enter the calculation.
Carta also reports that median valuation caps rose across SAFE sizes in 2026. For SAFEs above $2.5 million, the median valuation cap reached $35 million in Q2 2026, a 40% year-over-year increase. The 75th percentile approached $60 million.
What Happens When a SAFE Converts
A SAFE does not usually appear like normal shareholder ownership at the moment of signing. It gives the investor a future right to receive shares under agreed terms.
When the startup later raises a priced round, the SAFE can convert into shares. The conversion can then change the cap table.
Consider a company with founders, an employee pool, two SAFE investors, and a new Series A investor. The SAFE holders may receive preferred shares after conversion. The founders then own a smaller percentage of the company.
Carta gives an example where founders start with 8 million shares, an option pool has 2 million shares, and two SAFE investors each receive 555,555 shares after conversion. A Series A investor then receives 2,222,222 shares. In that example, the founders finish with 60%, the option pool has 15%, each SAFE investor has 4.2%, and the Series A investor has 16.7%.
This example shows why a cap table should model SAFE conversion before the next round closes.
Founder Ownership Falls Across Funding Rounds
Dilution normally grows as a startup raises more capital.
Carta’s 2026 Founder Ownership Report shows that the median founding team collectively owns 56.2% after a seed round. That figure falls to 36.1% at Series A and 23% at Series B.
These figures do not mean every startup follows the same path. A strong company with limited dilution can retain a much larger founder stake. A company that raises several large rounds can see a much sharper decline.
The key issue lies in the amount of equity sold at each stage and the effect of option pools, SAFEs, notes, and other securities.
Why the Cap Table Must Show the Future
A current cap table tells the company what ownership looks like today. A pro forma cap table tells the company what ownership could look like after a proposed financing.
That second view matters during negotiations.
A proper model can show the current shares, the new investment, SAFE conversions, the new option pool, the price per share, the post-money valuation, and the final ownership for every holder.
Carta’s current SAFE modeling tools also focus on this future view. The model can show current ownership, post-money ownership, post-money valuation, and post-money shares for each stakeholder and share class.
A Complete Before and After Model
A strong startup cap table should therefore contain several layers.
The first layer shows the current shareholders.
The second layer shows the existing employee option pool.
The third layer shows outstanding SAFEs and convertible notes.
The fourth layer shows the proposed new investor.
The fifth layer shows any new option pool required by the investor.
The final layer shows fully diluted ownership after all conversions and new shares.
This structure gives a much clearer picture than a simple table that lists founders and investors alone.
The Real Cost of a Funding Round
A funding round does more than add cash to the company. It also changes ownership.
A founder may raise $2 million and still hold the same number of shares. Yet the founder may own a much smaller percentage after the transaction. The company may also add a larger employee pool or convert earlier SAFEs into preferred shares.
The real question therefore is not only how much capital the company receives. The more useful question is how much ownership the company gives up for that capital.
A $2 million round for 10% creates a very different ownership result from a $2 million round for 25%.
The difference becomes even larger when a SAFE conversion or option pool adjustment enters the same transaction.
The Bottom Line
A startup cap table provides the clearest picture of ownership before and after a funding round. A simple priced round can create straightforward dilution, but real startup finance often contains SAFEs, convertible notes, option pools, warrants, and several share classes.
The latest 2026 data shows how important SAFEs have become at the pre-seed stage. 93% of pre-seed rounds used SAFEs in Q2 2026, 91% of SAFEs were post-money, and 94% of post-money SAFEs had valuation caps in the first half of 2026.
The founder ownership figures also show how dilution can build across several rounds. The median founding team held 56.2% after seed, 36.1% after Series A, and 23% after Series B in Carta’s 2026 data.
A reliable cap table should therefore show more than today’s ownership. It should show what happens after the next investment, after SAFE conversion, after an option pool increase, and after all new shares enter the fully diluted total. That before-and-after view gives founders, employees, and investors a much clearer picture of the real ownership cost of startup capital.
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