Business founders will hear the term “cap table” used a lot, especially when it’s time to raise money. Often it’s another term founders have to learn on the fly. With that in mind, here’s a rundown of some cap table basics.
In short, the cap table is literally a table (the Excel kind, not the dinner kind) listing the owners of a company and their ownership percentages. Owners can include company founders, employees, and outside investors. Often there is also a pool of shares set aside for future issuance of stock options.
Carta has a couple of articles detailing the basics of how the cap table works, example transactions, and 10 common cap table mistakes. Check out their articles below:
Carta is a provider of cap table management software, as well as 409A valuations.