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 $5M pre-money on a $1M 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.