Definition
Cap Table
A capitalisation table (cap table) is the record of who owns what in a startup — every shareholder, option holder and convertible, with their stakes.
The cap table lists founders, employees, angels and VCs, the number and class of shares each holds, the ESOP pool, and outstanding convertibles like SAFEs and notes. It shows fully diluted ownership and how each new round, option grant or conversion changes the splits.
Keeping the cap table clean and accurate is critical: a 'messy' cap table with too many small holders or complex preference stacks can deter later investors and complicate an exit. Founders model how each round dilutes the cap table before agreeing terms.
Related terms
- DilutionDilution is the reduction in existing shareholders' percentage ownership when a company issues new shares.
- ESOP PoolAn ESOP pool is the block of equity a startup sets aside to grant as stock options to employees.
- Liquidation PreferenceA liquidation preference gives preferred investors the right to get their money back (or a multiple of it) before common shareholders in an exit or wind-up.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.