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.