Perseids Intelligence
Practical guidance on private company ownership
Clear explanations of how ownership, fundraising, equity and private-market workflows actually work — written for founders, CFOs, investors and the people who advise them.
Cap Tables
Keeping an ownership record that survives diligence.
What is a fully diluted cap table?
A fully diluted cap table shows ownership as if every instrument that can become a share has already become one: issued shares, all granted options including unvested ones, the unissued option pool, warrants, and — depending on the convention used — outstanding SAFEs and convertible notes. It is the number investors negotiate against, because it reflects the ownership that will actually exist.
How to prepare a cap table for investor due diligence
Before you share a cap table, reconcile it to the documents: every line must tie to a signed instrument, every option to a board approval and a grant agreement, every convertible to its executed terms. Investors are not looking for a beautiful spreadsheet — they are checking whether the shares they are buying are the shares that exist.
How to build a startup cap table
Build a cap table by recording events in date order — founding issuances, later issuances, option grants, exercises, transfers and convertible instruments — and letting the ownership percentages fall out of that history. A cap table that starts as a percentages table and works backwards will not reconcile to your documents, and diligence is precisely the exercise of checking that it does.
Fundraising
Rounds, terms and what they do to ownership.
SAFE dilution explained
A SAFE does not dilute existing shareholders when it is signed — no shares are issued at that point. Dilution happens at conversion, usually in the next priced round, and the amount depends on the valuation cap, any discount, and whether the SAFE is a pre-money or post-money instrument.
Convertible notes and cap tables
A convertible note is debt that converts into equity, normally at the next qualifying round. On a cap table it needs five attributes tracked from day one: principal, interest rate, valuation cap, discount and maturity date. Interest accrues, so the conversion amount grows with time — which is why notes recorded as a flat cash figure produce the wrong share count.
Pre-money vs post-money valuation
Pre-money valuation is what the company is agreed to be worth before the new investment; post-money is that figure plus the money raised. Investor ownership is always the investment divided by the post-money valuation. Confusing the two on a £4m raise is worth more than three percentage points of the company, so confirm which basis a term sheet uses before you negotiate anything else.
How SAFE conversion works
A SAFE converts into shares at the next priced round, at whichever price is lower: the price implied by its valuation cap, or the round price reduced by its discount. The lower price means more shares for the holder. Everything else — how many SAFEs are outstanding, whether they are pre- or post-money, whether the pool is refreshed in the same round — determines how much of the company they take in total.
Equity & Dilution
How ownership percentages actually move.
How to model dilution in a startup funding round
To model dilution in a priced round, compute the post-money valuation, decide whether the option pool is created pre-money or post-money, convert any outstanding SAFEs and notes, then divide each holder's shares by the new fully diluted total. Dilution is the change in that percentage — not the change in the number of shares a holder owns, which usually does not move at all.
How startup dilution works
Dilution happens when a company issues new shares: your share count stays the same, the total grows, so your percentage falls. It is not a loss of value in itself — a smaller slice of a larger company is often worth more — but it is permanent, it compounds across rounds, and a surprising amount of it comes from option pools and converting SAFEs rather than the investor's cheque.
How much equity should founders give up?
Most priced rounds sell 15–25% of the company, and founders who add a pool refresh and converting SAFEs on top usually give up rather more than the headline. The right number is not a percentage; it is whatever raises enough capital to reach the milestones that justify the next round, at the best price you can defend.
Typical founder dilution by funding round
A founding team that raises a seed, a Series A and a Series B, refreshing the option pool along the way, commonly ends with 30–45% between them. The compounding does the work: each round scales every earlier percentage down, so a founder who models rounds by subtraction will always overestimate what they keep.
Data Rooms
Running diligence in a controlled space.
Startup data room checklist
A fundraising data room should let an investor answer their standard diligence questions without emailing you. In practice that means eight folders: corporate, cap table and equity, financials, commercial, product and technology, team, legal, and compliance. Completeness matters more than polish — a missing cap table costs more time than an unbranded spreadsheet.
How to structure a Series A data room
Structure a Series A data room in two stages. Stage one is a lean room opened when a fund moves past first meetings: deck, metrics, cap table summary, financial history. Stage two is the full room opened for confirmatory diligence after a term sheet, containing contracts, legal files and detailed people data. Staging protects sensitive material and keeps the early room readable.
How to migrate a startup data room from DocSend
To migrate a data room from DocSend to Perseids: export the Space as a ZIP, upload it through Import Existing Data Room, let Perseids reconstruct the folder hierarchy, optionally attach your historical visitor CSV, then set permissions, NDA gating and watermarking before re-inviting your audience. You do not rebuild the structure by hand.
What investors expect in a data room
Investors expect a data room that answers their standard questions without a call: a clean corporate history, a cap table that reconciles to signed documents, financials that tie to the model, and clear commercial evidence. Completeness matters less than consistency — a small room where everything agrees moves faster than a large one where two documents disagree.
Investors
Tracking and understanding private holdings.
Secondary
Liquidity in private shares, under company control.
Does a secondary share sale dilute existing shareholders?
A pure secondary transfer does not create new shares and therefore does not dilute existing shareholders. Ownership moves from one shareholder to another and the total share count is unchanged. What does change is who sits on the register, and sometimes what price the market considers current.
How ROFR works in a private company
A right of first refusal (ROFR) means a shareholder who wants to sell must first offer the shares, on the same terms, to whoever holds the right — usually the company, then existing shareholders. Only if the right is not exercised within the notice period can the sale to the outside buyer proceed. The precise mechanics are set by the articles and the shareholders' agreement.
Founder secondary in a funding round
Founder secondary is the sale of a portion of a founder's existing shares to an investor, usually alongside a priced round. It gives founders partial liquidity without an exit. It is not dilutive — no new shares are created for that portion — but it is a governance and signalling decision the board and lead investor will have views on.
Strategic Deals
Equity tied to commercial relationships.
Employee Equity
Pools, grants, vesting and exercises.
How large should an option pool be before a funding round?
Size the pool from the hiring plan for the period the round is meant to fund, usually the next 18 to 24 months. Investors commonly expect somewhere around 10% post-round at seed and Series A, but the defensible number is bottom-up: list the roles you will hire, attach a typical grant to each, add expected refresh grants, and compare the total with your unallocated pool.
Employee stock options and fully diluted ownership
An option grant means little as a raw number of shares. It only becomes meaningful as a percentage of the fully diluted total — including the unissued option pool — together with the exercise price and the vesting schedule. Those four figures are what an employee needs, and what a company should be able to produce without a spreadsheet exercise.
Private Markets
How private ownership infrastructure works.
Cornerstone guidance for this category is in preparation.
22 cornerstone guides published. Prepared by Perseids for general information — not legal, tax or investment advice.