Glossary / Cap Table

Cap Table

A cap table, short for capitalization table, is a spreadsheet or document that outlines the ownership structure of a company. It provides a detailed breakdown of the company's equity ownership, including the names of shareholders, the number and type of shares they hold, and the percentage of ownership each shareholder has. The cap table typically includes information such as: 1. Shareholder names: The names of individuals or entities that hold shares in the company. 2. Share classes: Different types of shares, such as common shares, preferred shares, or options. 3. Number of shares: The total number of shares issued for each share class. 4. Ownership percentage: The percentage of ownership that each shareholder holds in the company. 5. Vesting schedule: If applicable, the cap table may include information on vesting schedules for shares, which determine when shareholders can fully own their shares. 6. Conversion rights: If there are convertible securities, such as convertible notes or convertible preferred shares, the cap table may include information on the conversion rights and terms. 7. Option pool: If the company has an option pool for employee stock options, the cap table may include details on the number of options available and their allocation. 8. Valuation: The cap table may include the valuation of the company at different funding rounds or milestones. Cap tables are essential for startups and early-stage companies as they provide a clear picture of the ownership structure and help in making informed decisions regarding equity issuances, fundraising, and potential exits. They are also important for investors, as they can assess the dilution of their ownership stake in subsequent funding rounds. It is common for cap tables to be maintained and updated regularly as ownership changes occur, such as new investments, employee stock option grants, or share transfers.