Startup founders, entrepreneurs managing equity, and investors evaluating companies during fundraising.
They'll learn to construct accurate cap tables, track fully diluted ownership, avoid due diligence pitfalls, and implement maintenance best practices for smooth investments and exits.
Key Takeaways
A cap table records current share ownership and potential from options and convertibles for fully diluted view.
Critical for investors in due diligence to assess ownership before investing.
Must match official records like register of members and registry filings.
Errors like missing issuances or wrong calculations delay fundraising and exits.
Maintain as live document: update every equity event and reconcile regularly.
A cap table, short for capitalisation table, is a structured record of who owns shares in a company. It lists each shareholder, shares held, share class, and ownership percentage. It also tracks potential ownership from options and convertible instruments. Used as central reference for ownership structure.
What should a cap table include?
A cap table should include all issued shares by class and owner, employee options from share option plans, and convertible instruments like loan notes and SAFEs. This provides the fully diluted ownership if all convert to shares.
Why does a cap table matter during fundraising?
Investors review the cap table during due diligence to understand current owners, founder equity, employee reserves, and post-investment changes. An accurate cap table builds confidence; inaccuracies can delay or derail investments.
What are common cap table mistakes?
Common errors include unrecorded share issuances, undocumented option grants, missing convertibles, incorrect percentages, and mismatches with company registers. These often surface in due diligence, delaying fundraising or exits.
How should founders maintain a cap table?
Update immediately for every share issuance, option grant, or convertible. Record terms consistently, reconcile regularly with register of members, allotments, and registry filings to ensure accuracy.
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