Cap table and exit waterfall model
SAFE, priced round, option pool, who gets what. Price a seed round with a converting SAFE and a pool top-up, say who paid for the pool, and run the exit waterfall for a non-participating preferred.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: cap table and exit waterfall model.Updated 30 September 2026
Who builds it, and for whatThe table every venture associate keeps for every portfolio company and every term sheet under negotiation, and the first thing a founder’s lawyer opens. It answers who owns what after each round, what the option pool really cost and whom it cost, and what each holder walks away with at a given exit. In a growth-equity or late-stage private equity seat the same arithmetic sizes a preferred cheque and its preference.
| A | B | C | D | E | F | |
|---|---|---|---|---|---|---|
| 1 | Assumptions | |||||
| 2 | Blue cells only. Shares in millions, money in $ millions, so a price per share reads in dollars. | |||||
| 4 | Driver | Unit | Founding | SAFE (as if at cap) | Seed round | |
| 5 | Founding | |||||
| 6 | Founder A shares | m | 5.00 | |||
| 7 | Founder B shares | m | 3.00 | |||
| 8 | Options already granted or reserved | m | - | |||
| 10 | The SAFE | |||||
| 11 | SAFE amount invested | $m | 0.50 | |||
| 12 | Post-money valuation cap | $m | 5.00 | |||
| 13 | Discount to the round price (shown, not applied) | % | 0.0% | |||
| 15 | The priced round | |||||
| 16 | Pre-money valuation | $m | 12.00 | |||
| 17 | New money invested | $m | 3.00 | |||
| 18 | Unallocated pool wanted, % of post-money fully diluted | % | 10.0% | |||
| 19 | Pool top-up in the pre-money (1 yes, 0 after the round) | # | 1 | |||
| 21 | The exit | |||||
| 22 | Liquidation preference, multiple of money invested | x | 1.0x |
Click any cell. The inspector names the line, the schedule it belongs to and what kind of cell it is; blue on cream is an input, black a calculation, green a value from another sheet. Scroll sideways to see every year.
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Cap table and exit waterfall model: the workbook
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What the base case says
- Price per share
- 1.18
- Pool top-up (m shares)
- 1.27
- Founders after the round
- 63.0%
- Investor after the round
- 20.0%
- Investor at a $30m exit
- 6.00
Read from the workbook as served, every input at its default. Periods: Founding, SAFE (as if at cap), Seed round. The figures are invented and move with whatever you type in.
What this model is
A company from founding through a post-money SAFE and a priced seed round with an option-pool top-up, then an exit waterfall for the investor’s non-participating preferred, at five exit values.
The round is solved in closed form. The SAFE converts at its cap, the pool is topped up to the investor’s target, and the price per share falls out of the pre-money divided by everything the investor insists on counting.
The cap table shows three stages side by side, so the dilution from the SAFE and from the pool can be read separately from the dilution the new money causes.
Seats: Venture capital, Private equity.
How the schedules connect
Every row in the workbook is tagged with the schedule it belongs to; the inspector above shows the tag when you click a row. These are the schedules this model is made of and where each one lives.
Priced round and option pool
Pre-money to price per share, with the pool shuffle
Assumptions, rows 6–8 · Assumptions, rows 16–19 · Round, rows 12–23 · Cap Table, rows 6–11 · Cap Table, rows 14–20 · Cap Table, rows 23–24
SAFE conversion
What a post-money SAFE turns into at the round
Assumptions, rows 11–13 · Round, rows 5–9 · Round, rows 26–28
Exit waterfall
Preference or conversion, then what reaches the common
Assumptions, row 22 · Waterfall, row 6 · Waterfall, rows 9–15 · Waterfall, rows 18–26
What you should be able to explain
- Why a post-money SAFE’s ownership is fixed at amount ÷ cap and why every SAFE dilutes only the founders.
- What the option-pool shuffle does to the price per share when the top-up sits in the pre-money.
- Why the round can be solved in closed form, and what the lab’s iteration was converging to.
- When a 1x non-participating preferred converts and when it takes its preference.
- Why ownership is a fraction of the fully diluted count, and what fully diluted includes.
What a reviewer looks for
- Sizing the pool against the pre-round count, so it lands below the target the investor asked for.
- Converting a post-money SAFE against a capitalisation that already includes the pool top-up.
- A waterfall in which the preferred both takes its preference and shares pro rata without a participation right.
- Quoting the headline pre-money as the founders’ valuation when the effective pre-money, after the pool, is what they actually got.
Conventions this workbook uses
Stated on the cover sheet too. A model is only as trustworthy as the decisions it tells you it made.
- Shares are in millions and money in $ millions, so every price per share reads in dollars.
- The SAFE is post-money: its holder owns amount ÷ cap of the capitalisation before the round’s pool top-up, and is diluted by the top-up and the new money exactly as the founders are.
- The SAFE converts at its cap. A discount is compared and flagged, not applied: applying it would make the round price depend on itself, and a circular workbook is not one a reviewer will sign.
- With the pool in the pre-money, the top-up enlarges the count the pre-money is divided over, so the founders and the SAFE pay for it. With the pool after the round, the investor pays a share too.
- In the waterfall the SAFE is treated as common and the unallocated pool as granted, the conservative view for the founders. A shadow-preferred SAFE with its own preference is the Exit Waterfall Lab’s question.
Build it yourself
The starter workbook
The Round sheet has been cleared from the post-money down to the pool cost, and the Cap Table with it. Build the top-up, the price per share and the new shares so that the ownership table and the waterfall come back to life. The Checks sheet tells you when the pool lands on its target and the investor owns what was paid for.
Blanks: Priced round and option pool. Free with any account. Compare with the worked model when you are done: download above.
The path around this model
Understand it, drill it, read the build, then apply it to a real company.
Understand · Primer
Cap Tables and Startup Financing
Intro · a curated reel with a quiz
Build · Lab · ~15 min
Cap Table Builder
Convert a post-money SAFE, price a seed round and size an option pool by hand, and say who paid for the pool.
Build · Lab · ~12 min
Exit Waterfall Lab
Run a liquidation waterfall at any exit value, say where a preferred holder chooses to convert, and explain what a 1x non-participating preference actually costs the founders.
Read · Guide · 13 min
Cap Tables, Dilution and the Option Pool
Read · Guide · 13 min
Liquidation Preferences and Preferred Stock, Explained
Read · Guide · 12 min
SAFEs, Convertible Notes and Their Equivalents
Vocabulary: Cap Table (Capitalisation Table), Pre-Money Valuation, Post-Money Valuation, Option Pool, SAFE (Simple Agreement for Future Equity), Liquidation Preference.
Questions about this model
Why does the model not iterate like the lab?
Because it does not have to. With the SAFE converting at its cap, the pool top-up and the price per share have a closed form, which the Round sheet writes out line by line. The lab iterates because it lets a discount bind, and a discount price depends on the round price; a workbook that did the same would be circular.
Who paid for the option pool?
With the pool in the pre-money, the founders and the SAFE holder did: the top-up enlarges the count the pre-money is divided over, so the price falls and the investor’s money buys more shares. The Round sheet shows the effective pre-money, which is the valuation the founders actually received.
Why is the SAFE treated as common in the waterfall?
To keep one decision on the sheet. A post-money SAFE usually converts into shadow preferred with a 1x preference on its own amount, which is a second holder choosing between preference and conversion. The Exit Waterfall Lab runs that case with six instruments side by side; this model isolates the seed investor’s choice.
What happens with the pool after the round instead?
Set the switch to 0. The price per share is then the pre-money over the pre-round count, the investor pays for a share of the pool along with everyone else, and the Checks sheet stops holding the investor to investment ÷ post-money, because that is no longer what was agreed.
What does it cost?
Nothing to inspect: the whole workbook is on this page. A free account chooses one worked model to keep, and downloads every starter workbook. L3VLUP Pro ($25/month) downloads the whole library and opens every model’s formulas in the inspector.