What is a Cap Table and How to Manage It
Your cap table is one of the most important documents in your company. Here's how to understand and manage it properly.
What Is a Cap Table?
A capitalization table (cap table) shows who owns what percentage of your company.
Basic elements:
- List of all shareholders
- Number of shares each owns
- Type of shares (common, preferred)
- Percentage ownership
- Price paid per share
Why It Matters
For Fundraising
Investors scrutinize your cap table to understand founder ownership, previous investor terms, and option pool size.
For Decision Making
Helps determine who votes on decisions, who gets paid in an exit, and equity available for new hires.
Cap Table Components
Founders Shares
Common stock issued at company formation with vesting schedules.
Investor Shares
Preferred stock issued in funding rounds with specific rights.
Employee Option Pool
Shares reserved for employee equity grants, typically 10-20%.
Convertible Securities
Notes and SAFEs that will convert to equity later.
Common Mistakes
- Not tracking convertibles properly
- Ignoring option pool dilution
- Losing records
- Not updating after transactions
- Math errors
Cap Table Management Tools
Consider using dedicated software like Carta, Pulley, or Capshare for automatic calculations and scenario modeling.
Use AngelBacked to find investors who are a good fit for your ownership structure.