What it is
A cap table is the ledger of company ownership. It lists founders, investors, and employees, how many shares each holds, what class of stock, and each party's percentage on a fully diluted basis.
Facts
- Fully diluted figures include issued shares and outstanding equity awards, such as options and warrants, and may show SAFEs and convertible notes on an as converted basis.
- Common share classes: common stock (founders, employees) and preferred stock (investors).
- The option pool appears as reserved (sometimes unissued) shares.
- SAFEs and convertible notes show as pending conversions until a priced round.
Who it's for
Every founder from day one, and essential once you take on investors or grant options.
How it helps you
A clean cap table lets you model dilution from a new round, see each person's stake, and pass investor and acquirer due diligence smoothly.
Caveats
Managing a cap table in a spreadsheet becomes error prone quickly. Missing option grants or miscounted SAFEs create disputes and can derail a financing or acquisition.
Conclusion
Your cap table is the source of truth for ownership; keep it accurate and fully diluted from the start, ideally in dedicated software.
