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Ultimate Guide to the Cap Table

guide to cap table

The Cap Table (or Capitalisation Table) is an important tool in managing the ownership structure of a company. This is particularly relevant for startups where the capital structure changes quickly and often includes a variety of ownership instruments.

What is a Cap Table?

    • A Cap Table is a record of all the ownership interests in a company. At a minimum it records;

  • The legal holder of the shares
  • The # of shares held
  • The % of the total shares held
  • The $ paid for the shares

An example is shown below.

Assume there are 3 cofounders of a company who are allocated shares as shown below for consideration of a $1 per share;

Assume a new shareholder D invests in the company. They buy 50 shares at $10 per share in a Seed round of funding. The Cap table would be updated as follows;

    • Some points to note;

  • A new column for the Seed Round has been added
  • The Cap Table shows that Shareholder D now owns 9.1% of the company
  • The ownership interests of the founders (A, B & C) have been reduced (or diluted) as a result of the issue of shares to Shareholder D.

It is now also possible to calculate a valuation of the company based on the price paid per share by Shareholder D. The company valuation is 550 shares x $10 = $5,500.

Additional Share classes and instruments

In practice Cap Tables will record much more data than the example above.

Different types of share – for example, many startups issue “Preference shares” in addition to Ordinary shares. These are identified separately along with other classes of shares.

Contingent ownership interests – there are potentially many other forms of equity which may be issued including restricted shares, share options and convertible notes. These are considered “contingent” as they only convert to shares based on a defined event occurring. For example, employee share options may only convert to shares subject to length of service and performance.

A more expanded Cap Table accounting for the different raises might look more like the following.


Cap Tables usually show the ownership % on both a fully diluted and non-diluted basis.

Fully diluted ownership assumes all contingent ownership interests have been converted into shares.

Putting your interests into a cap table can help you gauge the impact of dilution and share price growth on the value of your equity over time.

Using the Cap Table

    • Apart from recording ownership interests, the Cap Table has several other uses;

  • To model different investment scenarios to determine the dilution of existing shareholders
  • To calculate and model the valuation of the company based on different investment scenarios
  • To understand and manage the type and number of shareholders and potential control implications

A well designed Cap Table can be a valuable tool in company administration and capital raising strategy. If you need help with organising your Cap Table reach out to the seasoned team at Fullstack whom can help withCFO services.

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Stuart Reynolds
is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, crypto and entrepreneurs.

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