Introduction: Why Your Equity Matters
You've just received an offer from a startup. Along with your salary, there's a line that says: "50,000 stock options at a strike price of $0.50." The recruiter mentioned the company is valued at $25 million, so you do the math: if the company is worth $25M and there are 10M shares, each share is worth $2.50. Your 50,000 options should be worth $125,000, right?
Not quite.
Startup equity is more complex than it appears. Between liquidation preferences, vesting schedules, 409A valuations, and the infamous "option pool shuffle," the value of your equity grant depends on factors that aren't spelled out in your offer letter. That's where CapTableIQ comes in.
CapTableIQ is a cross-platform desktop application built with .NET MAUI that helps employees, founders, and advisors understand the mechanics of startup equity. It models cap tables, funding rounds, dilution, 409A valuations, and exit waterfalls—translating the jargon of venture finance into clear, visual insights.
This article is your first look at CapTableIQ. We'll walk through the app's core features, load a real-world scenario (the Clarion story from our architecture docs), and show you how to read your equity snapshot. By the end, you'll know what your stock options are actually worth—and what needs to happen for them to pay off.
What Is a Cap Table and Why Should You Care?
A capitalization table (cap table) is a ledger that tracks who owns what in a company. It lists every share class—common stock, preferred stock, option pools—and shows how ownership is distributed among founders, investors, and employees.
Here's why it matters to you:
- Your ownership percentage isn't fixed. Every time the company raises money, new shares are issued, diluting everyone's stake. Understanding dilution is critical to valuing your equity over time.
- Not all shares are created equal. Preferred stock (held by investors) comes with liquidation preferences—they get paid first in an exit. Common stock (held by founders and employees) sits at the bottom of the waterfall.
- The 409A valuation sets your strike price. The IRS requires startups to value common stock using a 409A appraisal. This "fair market value" is almost always lower than the headline valuation you see in press releases. The gap between the two is where the preference stack lives.
CapTableIQ models all of this. The Cap Table tab lets you build a company's ownership structure from scratch or load a preset scenario.
Key takeaway: The cap table is the foundation. If you don't understand who owns what and what preferences sit above you, you can't accurately value your equity.
Your First Time Opening CapTableIQ
When you first launch CapTableIQ, you'll see a tabbed interface with five main sections:
- Cap Table — Build or load the company's ownership structure
- Funding Rounds — Model dilution across multiple rounds of financing
- My Grant — Calculate the value of your personal stock option grant
- Scenarios — Run exit simulations to see what happens at different sale prices
- About — Learn more about the app and replay the onboarding tour
First-time users are greeted with an interactive onboarding tour. You can replay the tour anytime from the About page or by tapping the "?" button in the shell's title bar.
Loading a Sample Scenario: The Clarion Story
The best way to learn CapTableIQ is to load a real-world scenario. The app ships with three presets:
- Clarion Exit — A $30M acquisition after raising $26M (the waterfall eats everything)
- Clean Exit — A founder-friendly structure with a single round of 1x non-participating preferred
- Unicorn — A high-growth company reaching $1B+ valuation across multiple rounds
Let's load Clarion Exit, which is based on the three-part equity series from our architecture docs.
The Clarion Story
Clarion was founded in 2014 by three co-founders:
- Marcus (CEO) — 3M shares (50% at founding)
- Jin (CTO) — 2M shares (33%)
- Sasha (VP Eng) — 1M share (17%)
Over the next six years, Clarion raised three rounds:
- Seed (2015): $2M at $8M pre-money, 10% option pool (pre-money)
- Series A (2017): $12M at $40M pre-money, 15% option pool (pre-money)—the shuffle
- Series B (2019): $12M at $68M pre-money ($80M post-money)
All rounds were 1x non-participating preferred—investor-friendly but not predatory.
In 2020, during COVID, Clarion was acquired for $30 million. After $1.5M in transaction fees, the net proceeds were $28.5M. The liquidation preferences totaled $26M. Common shareholders—founders and employees—received almost nothing.
Elena, an early employee who joined 8 months after the Series A close, had 50,000 options at a $2.12 strike price. She had vested 37,500 shares by the exit. Her payout? Roughly $0.
To load this scenario in the app:
- Go to the Cap Table tab
- Tap the Load Preset dropdown
- Select Clarion Exit
The app will populate the cap table, funding rounds, and Elena's grant. You'll see a pie chart showing ownership distribution and a summary of total shares, invested capital, and liquidation preferences.
Reading Your Equity Snapshot
Once you've loaded the Clarion scenario, navigate to the My Grant tab. This is where you'll see the 409A valuation gap and understand what your options are actually worth.
The 409A Valuation Gap
The headline valuation (what the press release says) and the 409A common stock FMV (what your options are priced at) are almost never the same. The gap exists because:
- Liquidation preferences sit above common stock. Investors get paid first.
- Discounts for lack of marketability (DLOM). Your shares are illiquid—you can't sell them on the open market.
- Minority interest discount. You don't control the company.
CapTableIQ estimates the 409A FMV using a simplified Option Pricing Model (OPM).
For Clarion at the time of Elena's grant:
- Headline per-share value: $80M / 14M shares = $5.71
- 409A common FMV: $2.12 (strike price)
- Gap multiple: 2.7x
This means the press release implied each share was worth $5.71, but the 409A valued common stock at $2.12. The $3.59 gap is the preference stack.
In the Money or Underwater?
Your options are in the money if the current 409A FMV exceeds your strike price. For Elena:
- Strike price: $2.12
- Current 409A FMV: $2.12
- Spread: $0.00 (at the money)
At the $30M exit, the 409A FMV collapsed to near zero because the waterfall consumed everything. Elena's options ended up deeply underwater.
The My Grant tab shows:
- Exercise cost: 37,500 vested options × $2.12 = $79,500
- Gross value at exit: ~$0
- Net value: -$79,500 (she would lose money by exercising)
The app displays this with a color-coded gauge chart—green for in the money, red for underwater.
Next Steps: Exploring Your Own Grant
Now that you've seen how the Clarion scenario plays out, it's time to model your own equity grant. Here's how:
1. Build Your Company's Cap Table
Go to the Cap Table tab and either:
- Start from scratch: Add share classes one by one (common, preferred, option pool)
- Load a preset: Use Clean Exit or Unicorn as a starting point and modify the numbers
- Import a scenario file: If you've saved a previous session, load it via the Import button
For each share class, enter:
- Name (e.g., "Series A Preferred")
- Type (Common, Preferred, or Option Pool)
- Share count
- Investment amount (for preferred)
- Liquidation multiple (1x, 2x, etc.)
- Participating vs. non-participating
2. Model Funding Rounds and Dilution
Switch to the Funding Rounds tab. Add each round your company has raised:
- Round name (Seed, Series A, Series B, etc.)
- Investment amount
- Pre-money valuation
- Option pool requirement (percentage of post-money)
- Pool timing: Pre-money (the shuffle) or post-money (fair)
The app will calculate dilution round-by-round and show you:
- Founder ownership over time (stacked bar chart)
- Headline vs. effective pre-money valuation (line chart)
- Total shuffle cost to founders (summary card)
3. Enter Your Grant Details
On the My Grant tab, fill in:
- Grantee name (you)
- Options granted (from your offer letter)
- Options vested (based on your cliff and vesting schedule)
- Strike price (from your grant paperwork)
- Grant date
The app will calculate:
- 409A common FMV (using OPM or a known value you provide)
- Gap multiple (headline vs. 409A)
- Exercise cost (vested options × strike price)
- In-the-money amount (current FMV - strike price)
You can toggle Advanced mode to adjust the OPM parameters (volatility, risk-free rate, time to exit).
4. Run Exit Scenarios
Finally, go to the Scenarios tab. Set a range of exit prices (e.g., $0 to $100M) and hit Run Scenarios. The app will:
- Simulate the liquidation waterfall at each exit price
- Calculate payouts for investors, founders, and you (the grant holder)
- Plot payout curves showing who gets what at different exits
- Identify breakeven points (minimum exit for common to receive anything, minimum exit for your grant to be worth exercising)
You can switch between All Three, Investor, Founder, or Grant Holder perspectives to focus on the stakeholder that matters to you.
- Transaction fees
- Liquidation preferences (paid in seniority order)
- Participating vs. non-participating preferred
- Participation caps
- As-converted vs. preference comparison for non-participating preferred
5. Export Your Report
Once you've run the scenarios, you can export a full HTML report by tapping Export Report. The report includes:
- Cap table summary
- Waterfall visualization (stacked bar chart)
- 409A valuation gap explanation
- Grant summary (exercise cost, net value, in-the-money status)
- Full narrative explaining what the numbers mean
Wrapping Up
Startup equity is a powerful wealth-building tool—but only if you understand how it works. CapTableIQ gives you the tools to:
- See through the headline valuation and understand the 409A gap
- Model dilution across funding rounds and quantify the option pool shuffle
- Simulate exit scenarios and know exactly what your options are worth at different sale prices
- Make informed decisions about exercising, negotiating, or walking away
The app is open-source and cross-platform. You can run it on Windows, macOS, Linux, iOS, or Android. All calculations are performed locally—your data never leaves your device.
Next steps:
- Download CapTableIQ and load the Clarion preset
- Walk through the onboarding tour
- Build your own company's cap table and grant
- Run exit scenarios and see what needs to happen for your equity to pay off
Your equity grant is a bet on the future. CapTableIQ helps you understand the odds.
Further Reading:
- The Option Pool Shuffle by Babak Nivi
- 409A Valuations Explained by Carta
- Understanding Liquidation Preferences by Y Combinator