Cap Table

The capitalization table (cap table) is a structured record — maintained by the company and typically managed by a law firm or equity management platform — of every ownership interest in the company. It includes all share classes (common, preferred by series), outstanding options and warrants, convertible notes and SAFEs, and reserved-but-unissued equity (option pool).

A clean cap table is essential for fundraising, secondary transactions, M&A, and IPO preparation. An unwieldy cap table — with hundreds of small holders, disputed entries, or unresolved convertible instruments — can create delays and legal costs at every liquidity event.

Illustrative example: a Series B cap table might show 40% common shares (founders + employees), 15% Series A preferred, 20% Series B preferred, 5% option pool (issued), 5% option pool (reserved), 10% warrants, and 5% SAFE instruments awaiting conversion. The fully diluted share count includes all categories; the basic count includes only issued shares.

The edge the pros know: secondary buyers should request a fully diluted cap table (or a simplified version) to understand their ownership percentage post-transaction. Many SPVs appear on the cap table as a single entity, obscuring the underlying number of beneficial owners. If the cap table shows 400+ entries, the company may impose stricter transfer consent requirements, as they approach SEC thresholds for mandatory public reporting.