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# Calculating a Seed Investor's Ownership on the Cap Table

### Q: I'm using your Startup Financial Model business plan pro forma app and I'm not sure I follow the Cap Table calcuations. Could you tell me how your capitalization table calculation works? I was trying to make some calculations on my own and could not get the same numbers. Below is the example of my simplistic calculations:

Assuming that I have a pre-money valuation of 1,000,000 euros and I want to issue some common stock to seed investors with a valuation of 1,154,089 Euros:

% to investors = 153,840/1,154,089 = 13.3%

However, in the pro forma model's cap table report, it's showing 11.8%. Can you please help me understand? A: Our app's cap table and the underlying calculations are correct. You are mistakenly trying to divide the amount invested by the pre-money valuation. The correct calculation is the amount invested divided by the post-money valuation.

In your example, the percent ownership is calculated by by dividing the investment by the post-money valuation as follows:

153,840 Euros divided by 1,307,929 Euros, which is 11.8%

Or, alternatively, you can also calculate the ownership by using the number of shares as follows:

133,300 shares held by the investor divided by the total outstanding shares after the investment of 1,133,300, which is 11.8%

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