fundraise 101 · updated 2026-05-28 · Inception Studio
Cap table 101 — dilution math founders get wrong
The three calculations every founder needs to do before signing a term sheet — and the common mistakes that turn a "good" round into a bad one.
NEEDS-REVIEW: Placeholder. Real authoring should come from mentors working through specific examples from cohort companies.
The three numbers every founder needs
- Post-money ownership. What you own AFTER the round closes.
- Fully-diluted ownership. What you own after option pool refresh, warrants, and outstanding SAFEs convert.
- Effective ownership at exit. Account for liquidation preference stack — what you actually take home at a $X acquisition.
The most common mistakes
- Ignoring option pool refresh. Most term sheets require expanding the option pool to a certain size pre-money. This dilutes founders, not the new investor.
- Stacking SAFEs without modeling conversion. Three SAFEs at three caps + a priced round = math that surprises everyone.
- Treating preferred as common at exit. A 1x non-participating preference plus a 2x participating tranche means the preferred get paid twice before common sees a dollar.
A simple worksheet
(Real content: downloadable spreadsheet that walks through pre/post-money, option pool refresh, SAFE conversion, and exit waterfall.)