captable

A cap table, or capitalization table, is a spreadsheet or document that lists all the securities and owners of a company and their respective equity stakes. It is a fundamental tool for understanding a company's ownership structure, particularly in startups and privately held businesses. The cap table details the different classes of stock, such as common stock and preferred stock, and identifies who holds these shares.

Key information typically found on a cap table includes the name of each shareholder, the type of security they own (e.g., common stock, stock options, convertible notes), the number of shares or units held, and the percentage of ownership this represents. For startups, the cap table is crucial for tracking the dilution of ownership that occurs as new investors provide funding and are issued new shares. It also accounts for equity compensation granted to employees, such as stock options and restricted stock units.

Beyond tracking ownership, cap tables are essential for financial modeling, valuation, and determining voting rights. They are consulted during fundraising rounds, mergers, acquisitions, and initial public offerings (IPOs). Understanding the cap table is vital for founders, investors, and employees to comprehend their economic and control interests in the company. Maintaining an accurate and up-to-date cap table is a critical aspect of corporate governance and financial management.