Cap Table (Capitalization Table)

A cap table tracks every equity holder in a company (founders, investors, employees with options, advisors with grants) along with the type of equity they hold (common stock, preferred stock, options, warrants, SAFEs, convertible notes). A well-maintained cap table shows both the current ownership and how it changes under various conversion scenarios.

For early-stage startups, the cap table starts simple: founder shares and perhaps a few SAFEs. It grows more complex with each fundraising round, adding preferred stock classes with specific rights (liquidation preferences, anti-dilution protections, participation rights). The cap table must accurately reflect all of these terms.

Managing the cap table manually becomes error-prone past the seed stage. Most startups use dedicated software (Carta, Pulley, AngelList Stack) to maintain a clean, auditable cap table. A messy or inaccurate cap table is a common reason due diligence stalls during fundraising; investors need to verify exactly who owns what before committing capital.