Definition
Cap Table Clean-up
Cap table clean-up is the tidying of a startup's ownership structure — consolidating small holders and resolving convertibles — usually before a major round or IPO.
Over time a startup's cap table can become messy with many tiny shareholders, unconverted SAFEs and notes, expired options and complex preference stacks. Before a large round or an IPO, founders and advisers clean it up — converting instruments, buying out small holders, and rationalising classes — to present a clear ownership picture.
A clean cap table reassures incoming investors and simplifies the due diligence and pricing of the next round. Messy cap tables can delay or derail financings and exits.
Related terms
- Cap TableA capitalisation table (cap table) is the record of who owns what in a startup — every shareholder, option holder and convertible, with their stakes.
- Convertible NoteA convertible note is short-term debt that converts into equity at a future financing round, typically at a discount or valuation cap.
- Due Diligence (VC)Due diligence is the investigation an investor conducts into a startup's finances, legal status, technology, team and market before investing.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.