Last Updated: December 16, 2021

What is a Cap Table?

Cap Tables or “capitalization tables,” are a spreadsheet or digital table that highlights a company’s ownership percentages, level and value of equity for founders, investors, and other owners involved in investment rounds.

The purpose of this record-keeping system is to provide a snapshot of all of the shareholders and security holders of a business. This tally is designed to ensure that the share count of a business or enterprise is equal to the total number of shares held by investors and other security holders such as management team members, founders, paid advisors, and rank-in-file staff.

Typically employed by startups and early-stage private companies, Cap Tables ideally will include a record of all equity ownership capital, including common and preferred equity shares and pricing, convertible equity, and warrants. A more in-depth table might integrate elements such as new funding sources, public offerings, mergers and acquisitions, and other sorts of enterprise related transactions.

Because companies are in a constant state of evolution and flux, traditional ways of ensuring that cap tables are continuously updated can be quite involved, particularly if it involves a large scale, rapidly growing business. The issuance of new securities, option pool increases, or the granting of options to employees is among the many events that can trigger a change to a capitalization table. Same with a termination event such as when employees exit a business or an investor redeems, transfers, or sells shares.

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