What is Cap Table?
A spreadsheet showing who owns what percentage of a company - the document that reveals how much your shares might really be worth.
A cap table (capitalization table) is a document that shows the complete ownership structure of a company - who owns shares, what type, and how much of the total equity they represent.
Why it matters: The cap table determines how IPO proceeds or acquisition payouts are distributed. Understanding it reveals whether your shares are actually valuable or buried under layers of preferred stock.
What's on a cap table:
- Founders: Original equity split
- Investors: VCs, angels, by funding round (Series A, B, C)
- Employee pool: Stock options reserved for employees
- Share classes: Common vs preferred, with different rights
- Convertible instruments: SAFEs, convertible notes
Key insight: Preferred shareholders get paid first in a sale. If a company sells for less than total invested, common shareholders (including employees) may get nothing.
Cap tables grow increasingly complex with each funding round as new share classes, option pools, and convertible instruments are added. For pre-IPO investors, understanding the cap table is essential because it reveals your true ownership percentage after dilution and your position in the payout waterfall relative to preferred shareholders.
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Examples
- 1.A startup raises $10M at $40M post-money. VCs own 25%, founders own 50%, employee pool is 15%, early angels have 10%.
- 2.After 5 funding rounds, early employees who owned 2% might be diluted to 0.5% - still valuable if the company succeeds, but cap table math matters.
Frequently Asked Questions
What is a cap table in simple terms?
Why should I care about a company's cap table?
How do I see a company's cap table?
Related Terms
More ipo markets Terms
IPO
An Initial Public Offering is when a private company sells shares to the public for the first time, allowing anyone to invest.
Direct Listing
An alternative to IPOs where existing shares are sold directly to the public without underwriters - no new shares, no lockups, no middlemen.
SPAC
A Special Purpose Acquisition Company raises money through an IPO to acquire a private company - a backdoor to going public without a traditional IPO.
Lock-up Period
The time after an IPO when insiders can't sell their shares - usually 90-180 days. When it ends, watch out for selling pressure.
Unicorn Startup
A privately held startup valued at $1 billion or more - once rare, now there are 1,200+ globally, but most retail investors can't access them.
Private Placement
A direct sale of securities to select investors without a public offering - how companies raise capital without the hassle of going public.
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