AFO · Glossary
Cap Table & Dilution
The record of who owns what percentage of a company's equity, and how new investment dilutes existing owners.
What this term means in practice
A capitalisation table tracks who owns what percentage of the company's equity at a point in time. Every priced round, every convertible note that converts, every warrant exercise, every option grant changes the cap table, and changes what the founders actually own at exit.
Dilution is the arithmetic effect of issuing new shares: existing owners now hold a smaller percentage of a (hopefully) larger pie. A founder who owns 70% before a round raising at $5,000,000 pre-money on a $1,000,000 investment ends up owning 70% × 5/6 = 58.3% after the round. Stack three rounds of similar dilution and the founder may end up below 30%.
The CPA models the cap table outcomes under realistic, base-case, and downside exit scenarios before any term sheet is signed. The headline dilution number is rarely the most important figure, liquidation preferences, anti-dilution protection, and participation rights often matter more in determining the founder's actual exit proceeds.
Where this matters in the catalog
Programs that turn on Cap Table & Dilution.
Angel & Strategic Equity Introductions
Curated introductions to angel investors, family offices, and strategic partners for early-stage capital.
Equity Crowdfunding
Public retail equity raises through securities-regulated crowdfunding platforms.
Where the definition meets your situation.
The CPA can walk through how this concept applies to your business in twenty minutes, what providers will ask, where the negotiation matters, what the trade-offs actually look like in your numbers.