A Capitalization Table or Cap Table is a sheet that shows the share allocation of a privately owned startup. You can see the exact breakdown of the company’s equity and how did that change over time, especially when different financing rounds are taken into consideration.
Why is it important?
With a Cap Table, the management can easily monitor changes over time, which is necessary because that’s one of the main ways the startup can keep track of its market value. Since the startup hasn’t had an IPO yet, the market capitalization is also calculated based on the Cap Table.
Furthermore, it allows having a clear picture of ownership distribution, especially when new potential investors would join the company.
Example of a Cap Table
A Capitalization Table should always be up-to-date, as even minor changes and misunderstandings can cause losses. When creating your own Cap Table, customization is also key: by adding details specifically important for your startup, you’ll be able to monitor your changes even better.
Download this template for a Cap Table and optimize it for your own needs!