Full Definition
A capitalization table (cap table) is a detailed spreadsheet or document that shows the equity ownership structure of a company, including all shareholders, their percentage ownership, the types of securities held, and how ownership changes over successive funding rounds.
What a Cap Table Includes
- Founder shares and vesting schedules
- Investor shares by round (seed, Series A, etc.)
- Employee stock option pool (ESOP) allocations
- Convertible instruments (SAFEs, convertible notes)
- Fully diluted ownership percentages
- Share prices at each round
Why Cap Tables Matter
A clean, well-maintained cap table is critical for fundraising. Investors review cap tables to understand ownership structure, potential dilution, and whether the founders retain enough equity to stay motivated. Messy cap tables with too many small investors or unclear terms can be a red flag.
Typical Cap Table After Series A
Real-World Example
A startup's cap table after Series A shows: founders 60%, Series A investors 25%, seed investors 10%, ESOP 5%.
Frequently Asked Questions
What is a cap table and why is it important?
How do you create a cap table?
What does fully diluted mean on a cap table?
Related Terms
The reduction in existing shareholders' ownership percentage when new shares are issued.
Ownership interest in a company, represented by shares of stock.
A reserved percentage of shares set aside for future employee stock options and equity grants.
The process by which an employee or founder earns their equity over time based on continued service.
The value of a company before receiving new investment in a funding round.
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