Cap Table
A capitalization table (cap table) is a spreadsheet or register that shows the complete ownership structure of a company, including every class of equity security outstanding, who holds it, at what price it was issued, and what percentage of the fully diluted company each holder owns.
The cap table is one of the most important governance and financial documents for a private company. It is the definitive record of who owns what, serving as the foundation for calculating dilution, modeling exit waterfalls, tracking option grants, and executing any financing or corporate transaction.
A basic cap table lists each shareholder, the number of shares held, the class of security (common, Series A preferred, Series B preferred, etc.), the price per share paid, and the resulting ownership percentage on both a basic (shares outstanding only) and fully diluted (including all options, warrants, and convertible instruments) basis.
As a company raises multiple rounds of financing, the cap table accumulates layers of preferred stock — each with its own liquidation preference, conversion ratio, anti-dilution provisions, and voting rights. Managing this complexity accurately is essential because errors in the cap table can lead to incorrect ownership allocations at exit and serious legal disputes.
The option pool is a dedicated block of shares (or shares authorized but unissued) reserved for employee stock options and other equity compensation. Investors typically require the option pool to be established or refreshed before a financing round, on a pre-money basis, which means the dilution from the option pool falls on existing shareholders rather than the new investor. The size of the option pool negotiation is a meaningful economic point in venture term sheets.
Cap table management software — Carta, Pulley, and Capshare are leading providers — has replaced manual spreadsheets for most institutionally backed companies, providing a verified ledger of equity ownership, automated 409A valuations, and scenario modeling tools for exit waterfall analysis.
For public companies, the analogous information is disclosed in the proxy statement and SEC filings, showing beneficial ownership by directors, officers, and major shareholders above 5% thresholds.