Cap Tables: Where Did My Company Go?

A founder raises a seed round: $2M on an $8M pre-money valuation. She does the mental math — $2M into $10M post-money is 20% — and figures she and her co-founder still hold 80%.

At the closing, the lawyer walks through the actual cap table. The term sheet required a 10% option pool, created before the money came in. The founders hold 70%, not 80%. The investor still holds exactly 20%.