Do you want to expand the employee option pool? Are you raising another funding round?Įither way, you can see exactly what impact actions will have on your shareholder groups. One of the primary uses of the cap table is to show how decisions impact the equity structure of a company. Shareholder name as it appears on the security,.You'll notice the cap table lays out the essential pieces of a transaction: ![]() Cap Table TemplateĪs the columns move from left to right, additional dilution items are applied to get an understanding of a person's actual ownership percentage of the company. ![]() Let’s look at a cap table template you can use as inspiration. Reserved shares: also called restricted shares, the total number of shares available for employees. ![]() Total number of outstanding shares: The total number of shares held by all stakeholders in the company.Total of authorized shares: The number of shares your company is authorized to sell.Valuation: Total cost of your business shares.This convertible debt is factored into all ownership calculations on a fully diluted basis, which is a way of looking at ownership where all outstanding warrants, options, and convertible notes are exercised.Įvery business has different needs, so some other variables that might be in a cap table are: Preferred stock can often be converted to a 1x payout of money invested.ĭebt that can convert into equity is another transaction often found on a cap table. The type of shares section indicates who has common shares with no special treatment vs. The ownership stakes section can sometimes list shareholder names and the number of shares they hold. Most startups need a voting agreement among common and preferred shareholders, so this element shows who needs to sign off on major company decisions (like a company sale or reorganization). It refers to who (founders, investors, or employees) owns what percentage of a business and who has the majority stake. Ownership stake is a crucial element of any cap table. Most capitalization tables are created at the inception of a business in the form of a spreadsheet carefully structured around a few variables we’ll outline below. Overall, a cap table is a single source of truth that gives a full picture of financial investments for any business, making it much easier to picture business cash flow and make informed decisions. It helps you manage company stock options and how much employees can be granted from the stock pool.It helps you track the value of equity and debt investments so that you can stay up-to-date on the financial status of your business.It provides an easy-to-understand visual of a business’ ownership structure of who owns what, who has invested, and individuals' levels of investment in the business.Whether you're a business owner or an investor, having a capitalization table is important because: It includes ownership stakes, types of shares, and option pools. ![]() It lists your company's securities (i.e., stock, options, warrants, etc.), how much investors paid for them, and each investor's percentage of ownership in the company.Ī cap table is the place of record for the equity-based transactions of a company. A cap table, or capitalization table, is a chart typically used by startups to show ownership stakes in the business.
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