Cap Table, SAFE & Convertible Note Dilution Waterfall – Excel XLSX

BENEFITS OF THIS DOWNLOADABLE EXCEL DOCUMENT

1. Solves the circular reference between price per share, converting SAFEs and the option pool top-up in twelve visible steps, without switching on iterative calculation.
2. Prices post-money SAFEs, pre-money SAFEs and convertible notes with accrued interest, each at its own conversion price, and shows which leg of the cap-or-discount test won.
3. Runs the exit waterfall with liquidation preference, participation and caps, then proves the result with twelve integrity checks.

VENTURE CAPITAL EXCEL DESCRIPTION

Cap Table, SAFE & Convertible Note Dilution Waterfall is an Excel template (XLSX) with a supplemental PDF document available for immediate download upon purchase.

This Excel model answers the two questions that decide whether a term sheet gets signed: who owns what after this round, and who gets what at exit.

Enter the cap table you have today, every SAFE and convertible note outstanding, and the terms of the priced round. The model converts each instrument at its own price, sizes the option pool, issues the new shares, and reports ownership before and after, dilution holder by holder, and the exit waterfall with liquidation preferences. Every figure is a live formula.

THE PROBLEM THIS MODEL EXISTS TO SOLVE

In a priced round with converting instruments, three things depend on each other at the same moment. The price per share is the pre-money valuation divided by the fully diluted share count. The shares issued to a discounted SAFE or note depend on that price per share. The option pool top-up is sized as a percentage of the post-round total, which includes both of the above.

Written directly into a spreadsheet, that is a circular reference. Excel refuses to calculate it until you switch on iterative calculation, a setting that travels with the file on some machines and not others, that changes the answer depending on the maximum-iterations value, and that a diligence reader is entitled to distrust. Most cap table templates avoid the problem by ignoring it: they price the round off the pre-round count, which overstates the price per share and understates founder dilution.

This workbook solves the loop explicitly. The Conversion Engine tab runs twelve iterations across twelve columns. Each column takes the previous column's fully diluted count, prices the round off it, reprices every discounted instrument, resizes the pool and produces a new count. The residual printed at the bottom shrinks to zero, and the Checks tab tests that it did.

WHAT IS INSIDE

Twelve tabs: Read Me, Dashboard, Assumptions, Pre-Round Cap Table, SAFEs, Convertible Notes, Conversion Engine, Round Waterfall, Post-Round Cap Table, Exit Waterfall, Sensitivity and Checks. Eight SAFE rows, five convertible note rows, five pre-round holder lines and one priced round.

Post-money SAFEs convert at their cap to a fixed percentage. Pre-money SAFEs and notes convert at the better of cap price and discount, and the model shows which leg won. Notes accrue simple interest from issue date to the round closing date. The option pool is sized to a target percentage of the post-round total, and you choose whether it is created before the round, where founders bear it, or after, where everyone does. Three scenarios switch from one cell.

The Exit Waterfall applies the liquidation preference to the preferred class, tests it against converting to common, and allocates proceeds, money multiples and share of exit to every holder. Non-participating, participating and participating-with-a-cap are all supported, as is the question of whether converted SAFEs and notes carry a preference at all. The Sensitivity tab reruns the whole waterfall across eight exit values.

HOW IT IS BUILT

No macros. No add-ins. No external links. No password protection, no locked cells and no iterative calculation setting to enable. A worked example runs through the whole file: three founders, a 1,000,000-share option pool, six SAFEs, two bridge notes and a 6m round at a 20m pre-money. A five-page PDF guide accompanies the workbook and documents every convention the model applies, along with its limitations.

Twelve integrity checks sit on their own tab and must all read PASS: the cap table adds up, ownership sums to 100 percent, price per share times the pre-money count equals the pre-money valuation, the iteration converged, shares times conversion price returns the money converted for every instrument, the exit waterfall distributes exactly the exit value, and more.

This workbook models the arithmetic of financing documents. It is not legal or tax advice.

Building this from scratch takes a competent financial modeller two to four days.

Source: Best Practices in Venture Capital, Integrated Financial Model Excel: Cap Table, SAFE & Convertible Note Dilution Waterfall Excel (XLSX) Spreadsheet, Balancewright