Putting Together a Cap Table (cap Table Management Software)

What is a Cap Table?

A Cap Table is a spreadsheet or table that shows a company’s equity capitalization, providing an analysis of the percentages of ownership, equity dilution, and equity value in each round of investment by founders, investors and other owners. It shows a company’s overall capital structure at a glance, as well as detailed ownership information for each class and series of outstanding stock.

A Cap Table should list the equity stakes in a company, including common stock, preferred stock, and stock options, and outline all the ownership details for these securities.

When setting up a Cap Table, note the following;

1. A Cap Table should be designed in a simple and organized layout
2. It should always be up-to-date
3. Use a centralized Cap Table software to avoid conflict with investors’ Cap Tables
4. Put an equity compensation plan in place early on, so you have a reference when hiring new employees

Cap Table Management Software

Cap Table management software makes for easier control and provides better capabilities, ensuring that your company data is accurate and consistent.

When choosing a Cap Table tool, founders should consider factors such as;

1. Ease of use; The cap table management software interface should be simple and save you time and money. It should help you navigate the complexities of the entire process.
2. The efficiency of cap table management; The software should enable you to track and manage all the data centrally.
3. Compliance; The software should aid in compliance with relevant regulations and taxes.
4. Growth and exit scenario modeling; The software should assist in mapping out various scenarios, assessing likely impacts on stakeholders, and selecting the best option for your startup.

Some software that founders can find helpful include;

1. Raise.io
2. Captable.io
3. Carta
4. Pulley
5. Ledgy

Data to include in your Cap Table include;

1. Founders
2. Company executives who own equity
3. Employees who own equity
4. Investor information
5. Conversion terms such as valuation cap, discount rate and anti-dilution provisions
6. Total number of shares of the company
7. Company valuation
8. Authorized shares
9. Outstanding shares
10. Unissued shares
11. Shares reserved for a stock option plan
12. Names of shareholders
13. Shares owned by each shareholder
14. Stock options
15. Fully diluted shares
16. Options remaining
17. SAFEs
18. Details of possible dilution when bringing on investors