A capitalization table, often called a cap table, is a detailed spreadsheet that displays all ownership interests of a company. It shows how shareholder’s equity changes over time with different scenarios.
An accurate and dynamic cap table is a powerful tool for all stakeholders of a company. Whether you are an investor, a company founder, or an employee with stock options, an exemplary cap table will answer many questions that people have in a quick manner. Adjusting inputs such as company valuations, investment amounts, and sizes of option pools will quickly show you what your equity stack looks like now and into the future. It allows owners to clearly see how much they can give in return for what their investors or employees will receive in forms of equity.
The majority of Venture First clients are either currently raising a financing round, have raised a round in the past, or are gearing up for a fundraise in the next 12 months. We use cap tables frequently in negotiations with current owners and investors, showing them how their ownership will look for a specific investment at a certain pre-money valuation. Going further, we show what their ownership dilution will look like in subsequent financings and what additional investment may be needed to maintain their current ownership in the company. Needless to say, we manage cap tables every day and we are good at it.