Convertible note cap table math in New Hampshire

Modeling how convertible notes will hit your cap table can be surprisingly tricky—especially once you add discounts, valuation caps, and multiple note rounds. This walkthrough focuses on how to model those mechanics for a New Hampshire corporation using the DocketMath convertible note cap table calculator: /tools/convertible-note-cap-table.

You’ll see what inputs matter, how they interact, and where New Hampshire–specific issues tend to show up in the math (without straying into legal advice).

Quick takeaways

• New Hampshire startups usually follow Delaware-style venture math, but formation, authorization, and corporate housekeeping happen under New Hampshire corporate law.
• Your cap table model for notes will turn on three core levers:

  • Conversion price (driven by discount and/or valuation cap)
  • Conversion timing (who converts in which round and in what order)
  • Capital structure (authorized vs. issued, option pool size, and liquidation preference setup)
• DocketMath’s convertible note cap table calculator lets you:

  • Compare discount vs. cap outcomes for each note
  • Run pre-money vs. post-money scenarios
  • Model multiple note rounds and SAFEs converging into one equity round
  • Export a scenario you can share with counsel or investors
• New Hampshire wrinkles are mostly around:

  • Making sure your authorized share count and charter terms match the model
  • Handling state filing requirements and corporate formalities when you increase authorized shares or create preferred stock
• The math is only one part of the story; the note terms and corporate documents control. Use the model to understand outcomes, then confirm with counsel.

Inputs you need

Before you open the calculator, gather these inputs. Having them ready will make the modeling go much faster.

Use this intake checklist as your baseline for Convertible Note Cap Table work in New Hampshire.

• note principal balance
• valuation cap
• discount rate
• pre-money valuation
• round size and option pool
• conversion timing

If any of these inputs are uncertain, document the assumption before you run the tool.

1. Basic company and round setup

You’ll want:

• ✅ Current fully diluted cap table

  • Common shares outstanding
  • Existing preferred shares (if any)
  • Option pool (issued + unissued, if you’re modeling fully diluted)
• ✅ Planned equity financing terms:

  • Target pre-money valuation (or post-money, if that’s how your term sheet is written)
  • New money raised in the round
  • Security type (typically Series Seed or Series A preferred)
  • Option pool target (e.g., “15% post-money”)

These inputs drive the baseline share price and total shares so the calculator can figure out how notes convert.

2. Convertible note terms

For each note, you’ll need:

• Principal amount (e.g., $100,000)
• Accrued interest (or interest rate + start date so you can estimate)
• Discount rate (e.g., 20%)
• Valuation cap (e.g., $6,000,000) – if any
• Most-favored-nation (MFN) or other special provisions (if you want to reflect them)
• Conversion trigger (typically a qualified equity financing)
• Whether the note:

  • Converts into the same series as the new money (e.g., Series Seed)
  • Converts into a shadow series (same economics, different designation)

In DocketMath’s calculator, you’ll enter these note-by-note. The tool will then compute the effective conversion price for each note.

3. New Hampshire corporate structure details

While the math looks like standard venture math, a few New Hampshire–specific details matter for modeling:

• Current authorized share count in your Articles of Incorporation
• Whether you’ve:

  • Already authorized a preferred class/series, or
  • Need to create a new series for the funding round
• Any par value you’ve set for common and preferred stock
• Whether you’re a New Hampshire corporation or a foreign corporation (e.g., Delaware) registered to do business in New Hampshire

You don’t need all of this to run the calculator, but you do need it to sanity-check that your modeled share counts are actually issuable under New Hampshire law and your charter.

How the calculation works

This section walks through the math logic that DocketMath uses for convertible notes in a New Hampshire context. The core formulas are jurisdiction-agnostic; the jurisdiction matters for what’s legally permissible, not how division and multiplication work.

DocketMath applies the New Hampshire rule set to the inputs, then runs the calculation in ordered steps. It validates the trigger date, applies rate or cap logic, and produces a breakdown you can audit. If you change any one variable, the tool recalculates the downstream outputs immediately.

Step 1: Determine the base share price for the round

You’ll typically start with:

• Pre-money valuation (Pre)
• New money raised (NewMoney)
• Pre-money fully diluted shares (FD_Pre) – including:

  • Common outstanding
  • Existing preferred (if any)
  • Option pool (if you’re treating it as fully diluted)

Baseline price per share (PPS) is:

PPS = Pre / FD_Pre

If your term sheet is post-money, DocketMath can invert the relationship to solve for the equivalent pre-money or adjust the logic accordingly.

Step 2: Compute each note’s conversion price

For each note, DocketMath compares:

1. Discount price

   DiscountPrice = PPS × (1 – DiscountRate)
   

2. Cap price

   First, compute the implied price from the valuation cap:

   CapPrice = Cap / FD_Pre
   

   (Some deal documents define the denominator differently; DocketMath lets you toggle how the cap is applied so you can mirror your documents.)

Then the conversion price for the note is:

ConversionPrice = min(DiscountPrice, CapPrice)

If a note has only a discount (no cap), DocketMath just uses DiscountPrice. If it has only a cap, it uses CapPrice.

Step 3: Convert principal + interest into shares

For each note:

• Total conversion amount:

  ConversionAmount = Principal + AccruedInterest
  

• Shares issued on conversion:

  NoteShares = ConversionAmount / ConversionPrice
  

DocketMath sums:

• All note shares
• New preferred shares purchased with cash in the round
• Existing shares (common + preferred)
• Any option pool adjustments

to produce the post-money cap table.

Step 4: Handle option pool sizing

Option pool math often changes the economics more than the note terms.

Common approaches:

• Pre-money pool: expand the pool before the new money and note conversions
• Post-money pool: target a specific percentage after the round

In the calculator you can set:

• Target pool size as a percentage (e.g., 15% post-money), or
• Target pool share count

DocketMath then solves for the number of new option shares needed and allocates dilution across:

• Founders/common holders
• Noteholders (depending on how your term sheet defines fully diluted)
• New money investors

Step 5: Allocate ownership and dilution

Once all share counts are computed, DocketMath outputs:

• Ownership % by:

  • Founders/common
  • Existing preferred
  • Each noteholder
  • New money investors
  • Option pool
• Implied effective price per share for:

  • Notes (based on their conversion)
  • New money investors
• Post-money valuation based on total shares × PPS

This gives you a precise view of how each note’s discount/cap impacts final ownership.

Where New Hampshire comes in

The formulas above are general. New Hampshire matters in a few specific ways when you translate the math into actual corporate actions:

• Authorized vs. issued: Under New Hampshire corporate law, you can’t issue more shares than are authorized in your Articles of Incorporation. If DocketMath shows you need 20M total shares and your charter authorizes 10M, you’ll need:

  • Board and shareholder approvals
  • Amended Articles filed with the New Hampshire Secretary of State
• Preferred stock terms: If you’re creating a new preferred series (e.g., “Series Seed Preferred”), the economics you modeled (liquidation preference, conversion rights, anti-dilution) must be reflected in:

  • Your Articles of Incorporation (or Certificate of Designation, depending on structure)
  • The financing documents

DocketMath doesn’t file anything with the state; it just helps you understand what the numbers look like so you can coordinate with counsel on the paperwork.

Common pitfalls

Even experienced founders and investors can mis-model note conversions. Here are issues that show up frequently when New Hampshire companies use the calculator.

• confusing pre-money and post-money caps
• forgetting to apply the discount versus cap test
• ignoring existing option pool dilution
• mixing share class terms

1. Ignoring accrued interest

It’s easy to model only the principal and forget interest.

• Impact: Understates noteholder ownership, overstates founder and investor stakes.
• Fix in DocketMath:

  • Enter principal and accrued interest separately for each note.
  • If you don’t know the exact interest, estimate conservatively and label the scenario.

2. Misreading “pre-money” vs. “post-money” definitions

Your term sheet may define:

• Pre-money excluding note conversions, or
• Pre-money including note conversions and/or option pool

If you model the wrong interpretation:

• Founders and investors can have very different expectations about dilution.
• New Hampshire corporate approvals may be based on a share count that doesn’t match anyone’s understanding.

How to handle this in DocketMath:

• Use the calculator’s breakdown (where available) to see:

  • What’s in the pre-money share count
  • How the pool and notes are layered in
• Document in the scenario notes how you treated each component.

3. Overlooking authorized shares and charter limits

New

Sources and references

Start with the primary authority for New Hampshire and confirm the effective date before relying on any output. If the rule has been amended, update the inputs and rerun the calculation.

• N.H. Rev. Stat. Ann. § 541:3

Capture the source for each input so another team member can verify the same result quickly.

Next steps

After you run the Convertible Note Cap Table calculation, capture the inputs and output in the matter record. You can start directly in DocketMath: Open the calculator.

Capture the source for each input so another team member can verify the same result quickly.

Related reading

• Deadlines reference snapshot for New Hampshire

• How to calculate deadlines in Delaware

• How to run deadlines in DocketMath for New Hampshire

• Why we started the DocketMath blog