What is Cap Table?

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 splitInvestors: VCs, angels, by funding round (Series A, B, C)Employee pool: Stock options reserved for employeesShare classes: Common vs preferred, with different rightsConvertible instruments: SAFEs, convertible notesKey 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.