Cap Table

A capitalization table (cap table) is the definitive record of a company's equity ownership structure. It lists every shareholder, the number and type of shares they hold, their ownership percentage, and the price they paid. It also tracks outstanding options, warrants, SAFEs, and convertible notes that will eventually convert into equity.

A clean cap table is essential for fundraising. Investors will scrutinize it to understand the ownership dynamics, identify potential red flags (like too many small investors or unusual terms), and model how their investment will affect the structure. Common red flags include excessive early dilution, multiple SAFE rounds with different caps, and large option pools that have not been allocated.

Founders should maintain their cap table from day one, even before raising money. Tools like Carta, Pulley, or even a well-structured spreadsheet can work. The key is accuracy: any discrepancy between your cap table and your legal documents will surface during due diligence and can delay or kill a deal.