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Cap Table

What is a Cap Table?

Cap Table, short for Capitalization Table, is a spreadsheet or table that typically represents a snapshot of a company’s ownership structure. It provides a detailed breakdown of a company's shareholders and their respective ownership percentages, as well as their equity dilution over time, including the equity owned by founders, management, employees, and investors.

Cap Table in More Detail

The Cap Table is essentially a ledger that lists all the securities the company has issued (such as common stock, preferred stock, options, warrants, etc.) and who owns them. It shows each type of equity capital, the amounts owned by each entity or individual, and their respective percentages of total ownership. This table is crucial for analyzing the impact of future investment rounds or the selling of shares on the distribution of equity among existing shareholders.

The term may refer to a tool used not only to track who owns what but also to plan future financial transactions and assess the impact of potential investment scenarios on ownership stakes. A Cap Table is dynamic and changes over time as new securities are issued, transferred, or repurchased. It is a fundamental element in financial planning and analysis, investor relations, and corporate governance.

Cap Tables are especially important in the context of startups and growth-stage companies, where investment rounds and employee stock options can significantly alter the equity structure. Accurate maintenance of the Cap Table ensures transparency with current and potential investors and is critical during funding rounds, exits, or any financial audits.

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