Cap Table
A cap table (capitalization table) is a spreadsheet or document that shows the ownership structure of a company — who owns what percentage, what type of equity they hold, and how ownership changes with each funding round or equity grant.
Cap Table Definition
A cap table (capitalization table) is a spreadsheet or document that shows the ownership structure of a company — who owns what percentage, what type of equity they hold, and how ownership changes with each funding round or equity grant.
Cap Table in Practice
A startup has two co-founders splitting 80/20 equity. After a seed round, investors take 15%, diluting both founders proportionally. The cap table tracks every share class — common stock, preferred stock, options, warrants — and shows exactly who owns what after each transaction.
Why It Matters
A clean cap table is essential for fundraising, acquisitions, and hiring with equity compensation. Investors review your cap table before writing a check. Messy or inaccurate cap tables signal disorganization and can delay or kill deals.
For founders, understanding your cap table means understanding how each funding round dilutes your ownership. It also helps you plan option pools for hiring without giving away more equity than intended.
FAQ
Q: When should I start maintaining a cap table?
A: From day one. Even a two-person company should have a formal cap table documenting the initial equity split. It only gets more complex over time.
Q: What should a cap table include?
A: All equity holders, share classes, number of shares, ownership percentages, option pools, convertible notes, SAFEs, and vesting schedules.
Related Terms
> Holdings offers free business checking with 1.75% APY. Open a free account →
Related Terms
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral. The borrower makes regular payments of principal and interest over a set term (typically 15 or 30 years), and the lender has the right to foreclose on the property if payments aren't made.
Accounts receivable (AR) is the money owed to your business by customers who have received goods or services but haven't paid yet. It's listed as a current asset on your balance sheet because it represents cash you expect to collect soon.
Accrual accounting records revenue when it's earned and expenses when they're incurred, regardless of when cash actually changes hands. It's the standard method required by GAAP and gives a more accurate picture of a business's financial health than cash-basis accounting.
A billing cycle is the recurring time period between billing statements — typically 28–31 days for credit cards and monthly for most business services. It defines when charges accumulate, when your statement is generated, and when payment is due. Understanding your billing cycles helps you manage ca