What is a cap table?

A cap table, short for capitalization table, is a document that records the equity ownership structure of a company. It outlines the percentage of ownership held by shareholders, including founders, investors, and employees, and tracks changes in ownership over time due to factors like investments, stock issuances, or acquisitions.

What is a cap table example?

A cap table example typically illustrates the ownership structure of a company, detailing the distribution of equity among shareholders. It showcases who owns what percentage of the company and provides insights into the impact of various transactions like funding rounds or equity grants on ownership stakes.

How to do cap table math?

Cap table math involves calculating ownership percentages, dilution effects, and valuation adjustments. To perform cap table math, you'll need to input data such as the number of shares issued, investment amounts, and any convertible securities. Utilizing formulas or specialized cap table calculators in Excel or Google Sheets can streamline the process.

How do you fill out a cap table?

To fill out a cap table, start by listing all shareholders and their respective ownership percentages. Then, input details of any existing shares, option pools, convertible securities, and recent transactions such as funding rounds or stock grants. Utilize a cap table template or calculator to organize and calculate the data accurately.

What should a cap table show?

A cap table should show:

- Names of shareholders

- Number of shares or ownership units held by each shareholder

- Percentage ownership of each shareholder

- Details of any convertible securities or options outstanding

- Historical transactions affecting ownership, such as funding rounds or stock issuances

Who prepares a cap table?

A cap table is typically prepared by the company's founders, financial team, or legal advisors. It requires input from various stakeholders involved in equity management, including investors, employees, and external counsel.

  What is a fully-diluted cap table and why is it important?
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 A fully-diluted cap table includes all potential shares that could be outstanding, including shares reserved for future issuance through options, warrants, convertible securities, and other instruments. It provides a comprehensive view of ownership and potential dilution scenarios, aiding in strategic decision-making and investor analysis.

How does a liquidity event impact the cap table?

 A liquidity event, such as an acquisition or IPO, can significantly impact the cap table by triggering the conversion of convertible securities into equity or resulting in the distribution of proceeds to shareholders. Understanding the implications of a liquidity event on the cap table is essential for stakeholders to assess their potential returns and plan accordingly.‍