Cap Table Template

A Capitalization Table (Cap Table) is a spreadsheet or table that shows the equity ownership, investments, and dilution over time among a company's shareholders. It's crucial for managing equity ownership and understanding the impact of future funding rounds or exit scenarios.

Why a Cap Table Is Important:

Tracks equity ownership and value.
Helps in making informed financial decisions.
Essential for negotiations with investors and valuation.

When to Use a Cap Table:

Raising new funding rounds.
Issuing new shares or options.
Planning for mergers, acquisitions, or IPOs.

Key Components of a Cap Table:

Shareholder Names:
- List of all equity holders including founders, investors, and employees with options.
Securities Owned:
- Types of securities (e.g., common shares, preferred shares, options, warrants).
Shares Owned:
- Number of shares each entity owns.
Percentage Ownership:
- Ownership percentage of each shareholder.
Valuation and Price Per Share:
- Company valuation at different funding rounds and the price per share.
Vesting Schedules:
- Details on how employee stock options vest over time.
Dilution:
- Future dilution scenarios based on potential investment rounds.

Setting Up a Cap Table:

Start Simple: Begin with founding shareholders and add complexity over time.
Maintain Regular Updates: Adjust for new rounds, exits, or equity grants.
Use Software Tools: Consider using cap table management software for scalability and accuracy.
Consult Professionals: Engage legal and financial advisors for compliance and accuracy.

Tips for Managing a Cap Table:

Accuracy is Key: Ensure all transactions are recorded precisely.
Understand Dilution: Be aware of how future funding affects ownership.
Plan for the Future: Model out future financing rounds and exits.
Transparency with Shareholders: Keep shareholders informed about their equity status.

Outcome: A well-maintained Cap Table provides clear insight into the equity structure of a company, facilitating better strategic decisions, investor relations, and financial planning as the company grows and evolves.