The final two stages of this cap table are to set up a series B capital round.

And this follows a very similar process to what we had with the series A capital round in that we need to make an adjustment to the employee stock option and then the capital raising round happens subsequently.

But the difference here is that we already have an employee stock option pool, and the aim is just to keep the employee stock option pool at 10% after the series B financing round.

So let's go and have a look at the calculations.

If we go down to row 69, we'll have some calculations to have a look at in relation to the employee stock option pool refresh.

It's not setting up in the first instance.

It already exists. It has a 10% stake in the company.

But what we've gotta think about is that if we didn't adjust it, it would be further diluted with this subsequent series B financing round.

But the aim is to keep the employee stock option pool at 10% after we've had this capital raising round.

So the same calculation as we did for the series A capital round, which is gonna be what we want after the series B round divided by one minus the series B percentage because this will be the dilution experience by this section, the employee stock option pool after the 25% of shares are created to give to the series B investors.

So what we want is the employee stock option pool to account for 13.3% of the business before the dilution takes place from the series B round.

However, this is not the full dilution that will be experienced by the other investors in the company because the stock option pool already has 10% of the business.

So to calculate the implied dilution factor for the existing shareholders, we need to think about what percentage ownership of the business they will have after these new shares are given to the esop, which is gonna be one minus the 13.3%.

And we need to divide that by what they currently have, which is 1 minus what the ESOP currently represents, which is 10% of the business.

So the dilution effect for the existing other investors other than the ESOP, to get the ESOP from the 10% they currently have up to the 13.3% that we need before the series B financing takes place, is that all of the other investors will now effectively only have 96.3% of the stake that they previously held.

So for the founders, we need to take their current stake in the business, the 58.3, and multiply it by the 96.3% dilution factor.

If we lock onto the dilution factor, then we can just copy this down for everybody else except for the ESOP.

And then say that the ESOP has 13.3% after they're given some additional shares to top them up to this 13.3% that we need before the series B financing takes place.

And this will give us a 100% allocation of the ownership of the company.

This then needs to go up into the cap table.

So it's just a matter of copying those numbers up and getting the sales in the right order.

And you can see that all of the existing owners of shares have been diluted through this refresh.

It's effectively a 3.7% dilution, the impact of topping up the ESOP to that 13.3%, but it does give us 100% of the shares in the business.

What we can now do is the very final step, which is exactly the same as we did for the series A financing round, which is to say that if the series B financing round is for 20% at the stake of the company, then the previous holdings that any investors has now equates to only 75% of the business.

So the founders have 56.1% of 1 minus the Series B investor, 75% of the business, which in total equates to 42.1% of the business.

And again, if we lock onto the series B rounds, we can just copy those down.

We'll need to do the ESOP separately, 13.3% multiplied by 1 minus the 25% stake for the series B investors will get us back to the 10% that we're looking for to start off with.

And the series B investors will end up with that 25% stake in the business, which then allows us to see all of these ownership stakes within the cap table.

And if we just zoom out a little bit, we'll be able to see the impact that all of these rounds of capital have had on the ownership percentage of the founders.

They've gone from a hundred percent ownership initially, and then the series A financing round gets them down from 83.3 to 58.3% of the business.

And then this series B round takes them from 58% of the business down to only owning 42% of the business.

And if we finally have that dilution formula, hopefully it's not a huge surprise that there's a 25% dilution that's created from the Series B allocation of 20%.