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← Statistics glossary

cap table

Also called: capitalization table, capitalisation table, cap-table

Short for capitalization table: a list of who owns what share of a company (founders, investors, employees with options), and how that changes with each investment, grant or sale.

A cap table (capitalization table) is the record of who owns the company: each founder, investor and employee with shares or options, how many they hold and what percentage that is. At the start it's usually one line per founder; it grows with every investment round, option pool and share transfer.

The cap table matters because it decides who gets what when money changes hands. When a company is sold, the price is split according to it (after any special rights investors may have). When an investor comes in, the cap table shows the dilution for everyone else. And it records the founders' own agreement: equal or unequal shares, and the vesting that ties those shares to staying with the company.

Keep it simple and written down from day one, even for two founders splitting 50/50. Put the split, the vesting terms and what happens if someone leaves into a signed agreement, not just a conversation. A messy cap table, with verbal promises, unclear percentages or departed co-founders holding large stakes, is one of the most common things that slows down or kills a later sale or investment.

Example

GarageDesk's cap table at the start has two lines: Nina 50%, Oscar 50%, with shares vesting over three years.

In year 2 an investor offers 3,000,000 UAH for 20%. If they accepted, the cap table would become Nina 40%, Oscar 40%, investor 20%, with the company valued at 3,000,000 / 0.2 = 15,000,000 UAH after the investment. If the company were then sold for 6,000,000 UAH (and the investor had no special rights), the split would be 2,400,000 UAH to each founder and 1,200,000 UAH to the investor. They decline, so a sale for the same price gives each founder 3,000,000 UAH.

Common mistakes

  • Verbal agreements. Write down the split, vesting and leaving terms from day one.
  • No vesting. Without it, a co-founder who leaves early keeps their full share.
  • Ignoring investor rights. Preferences can change who gets paid first in a sale.
  • Promising shares casually. "You'll get a few percent" to an early helper becomes a problem at sale time.