Cap Table Template

A capitalization table, commonly referred to as a “cap table,” is a critical tool for managing equity ownership in startups and private companies. It provides a detailed breakdown of a company’s ownership structure, tracking shares, options, convertible notes, and other securities, ensuring clarity for founders, investors, and stakeholders.

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Key Components of a Cap Table:

Equity Ownership: Lists all shareholders, including founders, employees, and investors, along with the number of shares they hold. This section is essential for understanding how equity is distributed across the company.
Share Classes: Breaks down the different types of shares issued by the company, such as common stock, preferred stock, and options. Each class may have distinct rights and privileges, which are crucial for equity management.
Convertible Securities: Tracks instruments like convertible notes and SAFEs, which convert into equity under certain conditions, impacting the cap table when conversion occurs.
Option Pool: Details the portion of the company’s equity reserved for future issuance to employees, advisors, and consultants. Managing the option pool is key to incentivizing your team without significantly diluting existing shareholders.
Valuation and Dilution: Provides insight into the company’s valuation and the impact of new equity issuances on existing shareholders. Dilution can significantly affect ownership percentages, making this section vital for all stakeholders.
Transaction History: Records all equity-related transactions, including issuances, conversions, and transfers. This historical data is crucial for understanding how the cap table has evolved over time.

How a Cap Table Works:

Cap tables track all equity-related transactions, offering a real-time view of ownership stakes and potential future dilution. They are used by companies at all stages, from early startups to mature businesses, to inform decisions on financing rounds, employee compensation, and exit strategies.

The cap table is not only a record-keeping tool but also a strategic asset. Investors and founders use cap tables to model scenarios, plan for fundraising, and ensure alignment among stakeholders. By understanding the cap table, companies can navigate complex financial decisions with greater confidence.

This template provides a comprehensive framework for building and managing your company’s cap table, ensuring transparency and alignment as your company grows.