What Is a Cap Table?
A cap table tracks who owns what in a company. Learn why it matters and how to maintain one properly from day one.
Key Takeaways
- A cap table is a record of all equity ownership in a company, including shares, options, warrants, and convertible instruments.
- It shows who owns what percentage, on both a fully diluted and outstanding basis.
- Maintaining an accurate cap table from the earliest stages prevents costly disputes and errors during fundraising.
What a cap table shows
A capitalisation table lists every equity holder in the company: founders, investors, employees with options, and holders of convertible instruments like SAFEs and convertible notes. For each holder, it shows the number of shares owned, the share class, the percentage ownership, and the price paid. A fully diluted cap table also includes shares that would exist if all options, warrants, and convertible instruments were exercised or converted.
Why accuracy matters
Every funding round, acquisition discussion, and employee equity grant depends on an accurate cap table. Errors compound over time and can derail transactions. A Nigerian startup that discovers cap table errors during a Series A due diligence process may face weeks of delays while lawyers reconcile discrepancies. Starting clean and maintaining accuracy from incorporation prevents these problems.
Common cap table mistakes
The most frequent errors include: not recording early founder share transfers, failing to track vesting schedules, ignoring the dilutive impact of outstanding SAFEs and options, and losing track of small angel investments made informally. Another common mistake is not modelling the impact of future rounds, leading founders to be surprised by their reduced ownership after a Series A.
Tools and best practices
Simple cap tables can be maintained in spreadsheets, but errors increase as complexity grows. Dedicated tools like Carta, Pulley, and Ledgy automate calculations, track vesting, and model future scenarios. Regardless of the tool, update the cap table immediately after every equity event: share issuance, option grant, SAFE signing, or share transfer. Never let it fall out of date.