Cap Table (Capitalization Table)
A record of who owns what portion of a company, including all shareholders, options, warrants, and securities outstanding.
A cap table lists every equity holder in a company — founders, employees, investors — along with the type, quantity, and terms of the securities they hold (common stock, preferred stock by series, options, warrants, SAFEs, and notes), and calculates ownership percentages both on an issued basis and a fully diluted basis (assuming all outstanding options and convertible securities are exercised or converted).
Keeping the cap table accurate and current is a core operational responsibility as a company raises multiple rounds, issues equity grants, and processes departures — errors compound quickly and can create real legal and trust problems, especially heading into a priced round or acquisition where every number gets scrutinized in diligence.
Every consequential event in a startup's life runs through the cap table. New financings dilute existing holders, option grants come out of the pool the cap table tracks, acquisitions distribute proceeds by the share classes it records, and 409A work depends on knowing the fully diluted share count. Errors compound silently and surface at the worst moment — a miscounted SAFE conversion found during Series A diligence can delay a round.
SAFEs and notes appear as convertible securities, not shares. They belong in the fully diluted view at their cap-implied ownership and convert when a priced round closes. Founders who forget them in dilution math are often surprised when conversion takes a bigger bite than the priced round itself.
Handshake equity is the classic cap table landmine. Promising an advisor or early hire a percentage without a signed grant, a vesting schedule, and board approval creates a disputed claim that surfaces in diligence. If it isn't documented with a grant date and vesting terms, treat it as not done — and clean up departed employees' expired, unexercised options promptly so they don't inflate the fully diluted count.
Two founders hold 10,000,000 common shares. They raise $3M at a $15M post-money valuation and create a 10% option pool at the same time. The founders' shares must equal 70% (100% minus 20% for investors and 10% for the pool), so fully diluted shares are 10,000,000 / 0.70 = 14,285,714. Investors get 2,857,143 shares at about $1.05 each, and the pool reserves 1,428,571 shares — nearly a third of the company changed hands in one round.
Use a dedicated cap table management tool from the earliest possible stage rather than a spreadsheet — spreadsheet cap tables are the single most common source of diligence delays and errors discovered right when a company can least afford them, during an active fundraise or acquisition.
What's the difference between an issued and a fully diluted cap table?
The issued cap table only counts shares actually outstanding today; the fully diluted cap table also assumes every outstanding option, warrant, and convertible security (SAFEs, notes) is exercised or converted, giving a more complete picture of eventual ownership dilution.
How do SAFEs appear on a cap table?
As convertible securities with a future claim, not as issued shares. They sit in the fully diluted view at their cap-implied ownership and convert into shares when a priced round closes.
When should you move off a spreadsheet cap table?
As soon as outside money arrives, and ideally at incorporation. Spreadsheets break once SAFEs, multiple option grants, and departures interact, and every priced round or acquisition starts with lawyers rebuilding the cap table.
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.