Cap Table Basics: Track Your Equity From Day One
Your cap table shows who owns what. Messy cap tables kill deals during due diligence. Clean ones close funding rounds. Here's how to maintain yours properly.
What Is a Cap Table?
A capitalization table listing all ownership in your company:
- Founders and their shares
- Investors and their equity
- Employee option pool
- Any other equity holders
Why It Matters
- Fundraising: Investors need to see clean ownership
- Hiring: Calculate option grants accurately
- Exits: Determine payout distribution
- Taxes: 409A valuations require accurate data
- Legal: Disputes resolved with clear records
What to Track
- Shareholder name
- Number of shares
- Share class (common, preferred)
- Vesting schedule
- Exercise price (for options)
- Grant date
- Vesting start date
Cap Table Tools
- Spreadsheet: Fine for early stage (up to 5-10 stakeholders)
- Carta: Industry standard, expensive but full-featured
- Pulley: Newer, more affordable
- Angellist: Good if using their platform
Common Mistakes
- Not tracking from day one
- Forgetting to update after grants
- Not tracking vested vs. unvested separately
- Mixing share classes incorrectly
- No backup or documentation
For Fundraising
Investors want to see fully-diluted ownership (including all options and convertibles). Your cap table should show both actual and fully-diluted views.
We Set Up Clean Cap Tables
Start right, stay right. We help you set up and maintain a cap table that won't cause problems later.