Cap table

Cap table (or “capitalization table”) is a detailed financial document showing company equity ownership—exactly who owns what percentage, in what form. Each row represents an investor or founder with their stake, share type, and valuation.

Practical cap table format looks like:

• Row 1: Founder A – 50 million ordinary shares (50%)
• Row 2: Founder B – 30 million ordinary shares (30%)
• Row 3: Angel investor C – 15 million ordinary shares (15%)
• Row 4: Employee Stock Option Pool – 5 million option shares (5% reserved)

Cap table becomes complex with increasing investors, especially with preferred shares. Preferred shares (used by VC funds) have additional rights—for example, in liquidation (company sale), preferred shares are paid first before ordinary shares. This means preferred share holders are “higher in priority” than ordinary holders.

Why is cap table important? It shows: (1) Who has control—if founder has 51%, they control; if 49%, others might override; (2) My stake value—if startup valued at $100 million and I own 10%, my stake is worth $10 million; (3) Dilution—with new funding rounds, existing owners may be diluted (their ownership percentage decreases).

Cap table is mandatory visualization required by all investors, and startups should update it regularly, especially after new investment or employee stock purchases.