Cap Table 101
How to build, read, and maintain your startup's capitalization table. Interactive examples showing how a cap table evolves from founding through Series A.
Interactive Cap Table
| Shareholder | Class | Shares | Basic % | Fully Diluted % | |
|---|---|---|---|---|---|
| 47.6% | 38.5% | ||||
| 47.6% | 38.5% | ||||
| 4.8% | 3.8% | ||||
| n/a | 7.7% | ||||
| n/a | 11.5% | ||||
| Total | 13,000,000 | 100.0% | 100.0% |
Anatomy of a Cap Table
Common Stock
Held by founders and early employees who exercised options. Lowest priority in liquidation. No special rights.
Preferred Stock
Held by investors from priced rounds. Has liquidation preference, anti-dilution protection, and board seats. Each round creates a new series.
Option Pool
Shares reserved for employee grants. Includes granted (vested and unvested) and unallocated. Counts toward fully diluted share count.
Convertible Securities
SAFEs, convertible notes, and warrants that will convert to equity at a future event. Counted in fully diluted but not yet issued.
Warrants
Rights to purchase shares at a set price. Often attached to debt or issued as part of a strategic deal. Counted in fully diluted ownership.
Your Cap Table at Each Stage
At Founding (2-4 rows)
Just common stock split between founders. Maybe an advisor with a small grant. The simplest it will ever be. This is the time to get the documentation right.
After Seed (5-10 rows)
Add SAFE holders (converting at Series A), a small option pool (10%), and possibly an angel investor. Fully diluted count starts diverging from basic count.
After Series A (10-20 rows)
New preferred stock class (Series A Preferred), expanded option pool, converted SAFEs now showing as preferred or common. Multiple share classes with different rights.
After Series B (20-50 rows)
Multiple preferred classes (Series A, B), each with different liquidation preferences and conversion terms. Complex conversion waterfalls. This is where spreadsheets break down and cap table software becomes essential.
Common Cap Table Mistakes
Not including convertible securities
SAFEs and notes that have not converted are real ownership claims. Ignoring them gives a false picture of founder ownership.
Confusing basic and fully diluted
Investors always calculate on a fully diluted basis. If you quote basic numbers, you are overstating your ownership.
Not updating after each grant
Every option grant, exercise, or conversion event changes the cap table. Falling behind creates a compounding error.
Handshake equity agreements
Verbal promises of equity without legal documentation create disputes and can prevent future fundraising. Always document.