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Venture Financing & Cap Table Dilution Simulator

Delaware Franchise Tax Impact of New Share Issuance & Capital Rounds

Planning to authorize new shares for an option pool, issue SAFEs, or close a priced Seed or Series A round? Simulate the exact change to your annual Delaware Franchise Tax bill under 8 Del. C. § 503 and prevent costly charter drafting traps.

1. Current Cap Table & Balance Sheet

Pre-Financing
Standard incorporation: 10,000,000
Shares held by founders/team
$
Cash in bank + total assets
Specified in original charter

2. Proposed Round or Option Pool Increase

Financing Plan
e.g. +3,000,000 Preferred + Option Pool
Purchased by investors at closing
$
Wire proceeds deposited into bank
Critical: Keep par value low
Projected Annual TaxAssumed Par Value Method
Current Annual Bill$450incl. $50 report fee
Post-Round Bill$1,650incl. $50 report fee
Net Annual Tax Delta:+$1,200/yr
Total Post-Round Authorized:13,000,000
Total Post-Round Gross Assets:$2,600,000
Authorized Shares Default Notice

If you do not recalculate using the Assumed Par Value method, the state will send an automatic bill for:

$110,715.00

By submitting your IRS Schedule L balance sheet, you save $109,065 every single year.

Estimate for informational purposes only, not legal or tax advice. Verify with a qualified CPA or corporate attorney before filing.

How to Authorize New Shares in Delaware (DGCL § 242)

To add shares for a new financing round or employee equity incentive pool, Delaware corporations must amend their Certificate of Incorporation. Here are the required statutory steps:

Step 1

Board & Shareholder Consent

Adopt a formal Board Resolution and obtain written consent from the majority of outstanding voting stockholders authorizing the share increase.

Step 2

Draft Certificate of Amendment

Draft the amendment specifying the exact new authorized share count and keeping the par value at $0.0001 or $0.00001.

Step 3

File with Division of Corporations

Submit Form with Delaware Secretary of State. The state filing fee is $214.00, plus optional expediting fees ($50–$1,000).

Need a CPA or Attorney to Review Your Cap Table?

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