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What is a Cap Table?

A Cap Table, or Capitalization Table, is a detailed spreadsheet or document that outlines the equity ownership, types of shares, and ownership percentages of a company. It includes information on founders, investors, and employees, as well as the dilution of shares over time through various funding rounds and option grants.

Components of a Cap Table

• Shareholder Names: Lists all individuals and entities owning equity.
• Types of Shares: Common shares, preferred shares, stock options, and warrants.
• Ownership Percentages: The proportion of the company owned by each shareholder.
• Dilution Information: Details on how ownership percentages change with new funding rounds or issuance of additional shares.

Example

Consider a startup with the following equity distribution after its seed round:

• Founders: 60%
• Early Investors: 20%
• Employee Stock Option Pool: 10%
• Seed Investors: 10%

As the company raises more funds, the cap table will be updated to reflect changes in ownership percentages and the issuance of new shares.

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