Inputs you will need

To run the Convertible Note Cap Table calculator for United States (Federal) in DocketMath, have the following inputs ready.

Use this as a checklist you can walk through with your documents open (term sheets, notes, and equity financing documents).

1. Company and round basics

• Company name (for labeling the output)

• Currency (typically USD for US deals)

• Pre-money or post-money framework for the equity round

  • Are you modeling a pre-money valuation (most common in older SAFEs/notes) or a post-money valuation framework?

• Equity round type

  • Seed / Series A / other label
  • New money amount raised in the priced round
  • Price per share or pre-money valuation (depending on what you know)

2. Existing capitalization (pre-financing)

You’ll need the company’s fully diluted cap table before the new equity round and before any notes convert:

• Common stock outstanding (founder + employees + other holders)
• Preferred stock outstanding (if any prior rounds)
• Outstanding options:

  • Granted but unexercised options
  • Remaining option pool (unallocated options)
• Any other convertible instruments:

  • SAFEs
  • Other convertible notes
  • Warrants (if you want them modeled)

3. New option pool details (if relevant)

Most US venture rounds include a requirement to increase the option pool to a target percentage:

• Target post-round option pool percentage (e.g., 10% or 15%)
• Whether the pool is:

  • Counted in the pre-money
  • Counted in the post-money

This matters because it changes who bears the dilution from the pool expansion (founders, existing investors, or new investors).

4. Convertible note-level inputs

For each convertible note you want to include, you’ll typically need:

4.1 Identity and principal

• Note holder name
• Original principal amount
• Issue date (for interest accrual)

4.2 Interest terms

• Interest rate (simple interest is typical for US startup notes)
• Interest type:

  • Simple interest
  • Compounded interest (if applicable)
• Interest accrual end date (often the equity financing closing date)
• Whether accrued interest:

  • Converts into equity, or
  • Is paid in cash and does not convert

The calculator uses these to compute total conversion amount = principal + (interest that converts).

4.3 Discount and valuation cap

Most US startup notes include one or both:

• Discount rate (e.g., 20%)

  • This gives the noteholders a discounted price per share compared to the new money investors.

• Valuation cap (e.g., $5,000,000)

  • This sets a maximum effective company valuation for the note conversion, usually resulting in a lower price per share than the round price.

• Whether the note uses:

  • Discount only
  • Valuation cap only
  • Better-of discount vs. cap (most common)
  • Custom priority (if the note specifies)

4.4 Conversion mechanics

• Conversion trigger:

  • Qualified financing threshold (e.g., minimum raise amount)
  • Whether the current round meets that threshold

• Conversion price formula:

  • Based on pre-money valuation, post-money, or a defined “Conversion Price” in the note
  • Any per-share floor or minimum price

• Security into which the note converts:

  • Same series as the new money preferred (e.g., Series Seed Preferred)
  • Shadow preferred or separate series (if specified)

• Rounding rules, if specified:

  • Round down to the nearest whole share
  • Standard rounding
  • Custom rounding (rare, but appears in some documents)

5. Priority and interaction between instruments

If you have multiple notes and/or SAFEs, DocketMath may ask you how they interact:

• Whether notes convert:

  • All at the same effective price
  • Each at their own price based on their own cap/discount

• Whether any notes have:

  • Seniority in conversion
  • Most-favored-nations (MFN) provisions that match better terms from other instruments

• Whether SAFEs convert before or together with notes for purposes of:

  • Calculating fully diluted capitalization
  • Allocating the new option pool

6. Post-money ownership targets (if modeling backwards)

Sometimes you’re not just modeling “what happens,” but instead trying to solve for a result—e.g., “I want founders to end up at about 60%.”

If you’re using DocketMath to back into a structure:

• Target founder ownership range after the round
• Target new investor ownership range
• Constraints:

  • Maximum dilution from note conversion you’re willing to accept
  • Maximum option pool size you’re willing to create

DocketMath doesn’t replace legal or tax advice, but it can help you see the math behind different scenarios so you can discuss them more clearly with counsel and investors.

Where to find each input

Here’s where these numbers usually live in a typical US startup documentation set.

Input category	Typical source documents
Company name, round label	Board consents, financing term sheet, draft stock purchase agreement
Pre/post-money valuation	Term sheet, stock purchase agreement, investor deck
New money amount	Term sheet, stock purchase agreement
Existing cap table	Company cap table spreadsheet or cap table software (Carta, Pulley, etc.)
Outstanding options & pool	Equity incentive plan, option ledger, cap table
New option pool target	Term sheet (often labeled “ESOP size” or “option pool increase”)
Note principal & issue date	Individual convertible promissory notes
Interest rate & method	Convertible note documents (interest section)
Accrual end date	Closing date of the equity round (from closing docs or timeline emails)
Discount rate	Convertible note term sheet and note body
Valuation cap	Convertible note term sheet and note body
Conversion mechanics	Convertible note (conversion section, definitions of “Conversion Price”)
Qualified financing threshold	Convertible note (definition of “Qualified Financing” or similar)
Security type on conversion	Convertible note (conversion section)
Rounding rules	Convertible note or stock purchase agreement
SAFE interaction / MFN	SAFE documents, side letters, note MFN clauses

Run it

Once you’ve gathered your inputs, you’re ready to plug everything into the Convertible Note Cap Table calculator in DocketMath.

1. Open the calculator
   Go to: /tools/convertible-note-cap-table

2. Enter company and round basics

   • Add the company name, round label, and valuation/price info.
   • Specify whether the model is pre-money or post-money based.

3. Load the existing cap table

   • Input common, preferred, options, and any existing SAFEs or warrants.
   • Make sure the totals match your latest signed documents.

4. Add each convertible note

   • For each note, enter:

     • Principal, issue date, interest rate, and whether interest converts.
     • Discount and/or valuation cap, and the rule (discount, cap, or better-of).
     • Any special conversion mechanics or security differences if the tool prompts for them.

5. Configure option pool and instrument interactions

   • Set the target option pool percentage and whether it’s pre- or post-money.
   • Indicate how SAFEs and notes should be treated relative to each other if prompted.

6. Run the calculation

   • Generate the cap table and review:

     • Shares issued on conversion of each note
     • Effective conversion prices
     • Ownership percentages by holder and holder type
     • Dilution impact from the new option pool

7. Iterate with scenarios (optional)

   • Adjust:

     • Valuation
     • Round size
     • Option pool percentage
   • Re-run to see how each change affects:

     • Founder ownership
     • Noteholder ownership
     • New investor stake

If you want a more detailed, step-by-step breakdown of how DocketMath is doing the math (especially around conversion prices and fully diluted share counts), you can use Explain++ inside the product to trace each step rather than treating it as a black box.

For a broader workflow on documenting your assumptions and jurisdictional context when you run these calculations, see our guide on jurisdiction-aware workflows before or after you run the tool.

Related reading

• Introducing Explain++: step-by-step calculation breakdowns
• A practical workflow for jurisdiction-aware legal calculations

Inputs you will need

Use this checklist to gather the core inputs before you run the Convertible Note Cap Table tool.

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

If an assumption is uncertain, document it alongside the calculation so the result can be re-run later.

Where to find each input

Most inputs live in the case file, contracts, or docket entries. Dates usually come from the triggering event notice; rates and caps come from governing documents or statute; and amounts come from the ledger or judgment. Record the source for each value so the run is reproducible.

Run it

Enter the inputs in DocketMath and run the Convertible Note Cap Table calculation to generate a clean breakdown: Run the calculator.

When rules change, rerun the calculation with updated inputs and store the revision in the matter record.

Related reading

• Inputs you need for deadlines in Australia

• Inputs you need for interest in North Carolina

• Common deadlines mistakes in United States (Federal)

• Why we started the DocketMath blog