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A startup cap table walkthrough

Follow an AI infrastructure startup from a Y Combinator SAFE through a capped pre-seed to a priced seed, one round at a time, and watch how the founders' ownership changes. The scenario numbers are illustrative, but the SAFE mechanics are real.

In this scenario, three founders carve out a 10% option pool first and then split the remaining 90% between them, which works out to 30% each. YC invests $500,000 as a $125,000 post-money SAFE for 7% plus a $375,000 uncapped SAFE with an MFN clause. The pre-seed is $5,000,000 at Demo Day on a $20,000,000 post-money cap, and the seed is $15,000,000 priced at a $50,000,000 post-money valuation. Step through it below.

How the ownership changed

Here is the same story compressed into a single table. The founders carry all of the SAFE dilution, and then everyone on the table is diluted again by the priced seed.

How the mechanics work

Post-money SAFEs do not dilute each other

Each post-money SAFE promises a fixed percentage of the fully diluted table at conversion, and that promise is written into the SAFE document itself. Because every SAFE makes the same promise at the same time, none of them shrinks another. The founders and the option pool absorb all of the combined dilution, which is why the founders go from 90% to about 56% of the pre-money table on the SAFEs alone, before the priced seed even arrives.

What the MFN does

YC's uncapped $375,000 SAFE adopts the best cap the company hands anyone before the priced round. The $20,000,000 pre-seed cap becomes that cap, so YC's MFN converts at 1.875%. Without a capped pre-seed, the MFN would convert near the seed valuation and be much smaller. Giving YC a low cap to latch onto raises its take and the founders' dilution, which is the counterintuitive part of the walkthrough above.

The option pool top-up

Seed investors usually want the pool set at 10% of the pre-money table, before their money goes in, and that requirement is written into the term sheet. It is the founders who create that pool rather than the seed investors, so the top-up from 1,111,111 shares to 1,781,737 shares is a quiet extra dilution that lands on the founders. The pool size is negotiable, so it is worth modeling before you sign rather than after.

Cap tables are illustrative here, but the structure is real, and a clean one is worth getting right from the first SAFE. The record itself typically lives with company counsel or on a cap table platform, and a surprise at the priced round usually traces back to a SAFE nobody modeled at signing. If you want a hand modeling your own rounds, see our fractional CFO practice, or how the same money moves through a fund in how capital flows.

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