What is a cap table and who needs one?
A capitalization table, or cap table, lists every person and fund that owns shares or has rights to shares in your company, with how many they hold and what percentage that represents. A fully diluted cap table also counts the whole option pool and anything that can convert into shares.
Every founder with a co-founder, an employee option grant or an investor needs one. Investors ask for it early in a raise, and new hires often ask what their options represent.
When do you need to update it?
Update the cap table after every option grant, exercise, transfer or financing, and before you start fundraising conversations. Modeling a round before a term sheet arrives lets you see how much of the company you would give up at different valuations.
How to fill in the cap table template, step by step
01List every shareholder
Add each founder, investor and the option pool on its own row with role, security type and share count taken from signed documents.
02Count fully diluted shares
Total all issued shares, the whole option pool and anything convertible. This is the number ownership is measured against.
03Compute ownership percentages
Divide each holder's shares by the fully diluted total and check that the column adds up to 100 percent.
04Model the round
Enter the pre-money valuation and investment amount in the calculator to see the new investor's shares and everyone's ownership after the round.
05Reconcile and keep it current
Check every row against signed paperwork before sharing, and update the file after each change.
What does a modeled round look like?
Before the round (10,000,000 fully diluted shares) Founder A 4,000,000 40.0% Founder B 3,000,000 30.0% Option pool 1,500,000 15.0% Angels 1,500,000 15.0% Seed round: $2,000,000 at an $8,000,000 pre-money valuation Price per share = $8,000,000 / 10,000,000 = $0.80 New shares = $2,000,000 / $0.80 = 2,500,000 After the round (12,500,000 shares) Founder A 32.0% Founder B 24.0% Option pool 12.0% Angels 12.0% Seed investor 20.0%
The company and figures are invented. Real rounds often resize the option pool before the investment, which changes the result, so check terms with your lawyer.
Common cap table mistakes
Leaving out the option pool
Ownership calculated on issued shares alone overstates everyone's percentage.
Forgetting convertibles
Simple agreements and notes convert into shares at the next round. Include them in your model.
Rows that do not match paperwork
Every line should trace back to a signed document. Investors will check.
Updating it only once a year
Grants and exercises add up. A stale table creates confusion during a raise.
Cap table template questions
What should a startup cap table include?
List every shareholder with role, security type, share count and ownership percentage, plus the full option pool and any convertible instruments, totaled on a fully diluted basis.
What does fully diluted mean?
Fully diluted counts all issued shares plus every share that could be issued, including the whole option pool and convertible instruments. It shows ownership if everything converted.
How do I calculate ownership after a priced round?
Divide the pre-money valuation by fully diluted shares to get the price per share, divide the investment by that price to get new shares, then divide each holder's shares by the new total.
Can I use a spreadsheet for my cap table?
A spreadsheet works well for early companies with few holders. Many founders move to dedicated software as grants and rounds increase. Either way, keep it matched to signed documents.