Startup Equity: Cap Tables, SAFEs and Splits
This guide explains the ownership decisions founders make from incorporation to Series A: how to read and keep a cap table, how to split equity with a co-founder, how SAFEs work and convert, how much equity to give early employees and advisors, and how each round dilutes the company.
What should founders understand about equity?
Who owns what, how that changes with every SAFE and round, and how to share it with co-founders and employees fairly. Most equity problems come from things not written down: unvested founders, verbal promises and SAFEs nobody added up. Start with cap table basics.
| Holder | Own |
|---|---|
| Founder A | 45% |
| Founder B | 45% |
| Pool | 10% |
| SAFE | Cap | Own |
|---|---|---|
| A $500K | $8M | 6.25% |
| B $500K | $10M | 5% |
Illustrative.
Related guides cover the rest: running a raise in how to raise a seed round, option tax in employee stock options and CCPC status in CCPC status and SR&ED.
Where should you start?
From the founding split to the first priced round. Each card opens the page for that step.
Fair split, founder vesting.
Protects: the teamSee the pageOne source of truth.
Speeds: diligenceSee the pagePool first, then grants.
Avoids: running outSee the pageCaps, discounts, MFN.
Keeps: it simpleSee the pageBefore you sign.
Shows: real dilutionSee the pagePre, post and the pool.
Protects: ownershipSee the pageWho owns what
Read a cap table, split equity between co-founders and set founder vesting.
Raising money
How SAFEs work, how they convert, and how each round dilutes the cap table.
If it isn’t signed, it isn’t on the cap table.
Founder vesting, written grants and a tracked SAFE stack prevent most equity disputes. Model every round before you sign it.
Frequently asked questions
What is a cap table?
A record of who owns the company’s shares, options and convertible securities.
How should co-founders split equity?
Based on future contribution, often close to equal for founders who start together, always with vesting.
What is a SAFE?
A simple agreement for future equity: money now in exchange for shares at the next priced round.
How do SAFEs dilute founders?
With post-money SAFEs, each SAFE’s ownership is its investment divided by the cap, taken from existing holders.
How much equity should early employees get?
Grants sized to role and stage within an option pool, often 10% to 15% at seed.
Is this legal advice?
No. It is general information. Use a startup lawyer and tax advisor for equity decisions.
Sources & further reading
Standard documents and tax rules change. These sources let you check the current terms directly.