Cap Tables? The startup founder's guide

What is a cap table?

A cap table, or capitalization table, is a chart typically used by startups to show ownership stakes in the business. It lists your company's securities (i.e., stock, options, warrants, etc.), how much investors paid for them, and each investor's percentage of ownership in the company.

A cap table is the place of record for the equity-based transactions of a company. It includes ownership stakes, types of shares, and option pools.

How To Make a Capitalization Table

Most capitalization tables are created in a spreadsheet at the inception of a business. It should be carefully structured around a few key elements.

Ownership stake refers to who (founders, investors, or employees) owns what amount of the business or who has control over the company. Since most startups need a voting agreement among common and preferred shareholders, this view shows who needs to sign off on major company decisions (e.g., company sale or reorganization). The ownership stakes section will also often list shareholder names and the number of shares they hold.