What Is A Cap Table, Why Do You Need One and What Should It Look Like?

by Cooley LLP

A “Cap Table” is a List of Your Company’s Securities

At its most basic level, a cap table is just a list of your company’s securities (i.e., stock, options, warrants, etc.) and who owns those securities. A cap table should tell you “who owns what.” More complex cap tables may also include formulas that model out various hypothetical transactions (e.g., new financings, sales of the Company (M&A) or public offerings). Cap tables can be summary in nature (e.g., grouping all holders into simplified buckets such as “founders” and “investors” and/or grouping multiple series of preferred stock into a single “preferred stock” bucket) or detailed in nature (e.g., providing granular detail on the holdings of each individual owner and each individual type of security). There is no one right or wrong format for a cap table. It all depends on how you will be using the cap table.

Your cap table must be current at all times to make good decisions

You need a cap table because, as an entrepreneur, you will be constantly making decisions that impact your capitalization and/or are colored by your capitalization. For example, if you are considering a new financing, you need to be able to quickly run scenarios based on different pre-money valuations, different round sizes, different available option pool targets, etc.   Or, if you are recruiting a new COO and the candidate asks for options covering a certain percentage of the company, you need to be able to quickly determine whether you have sufficient shares available in your option pool, determine how dilutive the new grant will be to other holders and calculate the exact number of shares that represents the requested percentage. If you don’t have an accurate and well-organized cap table then you will be flying blind and unable to quickly make good decisions quickly. An accurate and well-organized cap table will empower you to make good decisions quickly.

There is no “right” way to format your cap table: keep it organized and simple

As we mentioned above, there is no one right or wrong format for a cap table. It all depends on what questions you are trying to answer. The right cap table for a CEO might look different than the right cap table for a CFO. And the right cap table for a company that is trying to analyze multiple VC term sheets might look different than the right cap table for a company that just closed its Series A financing. So to answer this question, we will assume you are the typical founder/CEO of a company that is either venture backed or on a trajectory to receive venture financing and give you the following general tips that should apply in almost all situations:

  • Keep it Organized and Simple. As we noted above, at a minimum you are going to want to be able to quickly tell what securities are outstanding and who owns those securities. So your cap table should generally be organized with the list of security holders along the Y axis and various types of securities along the X axis. All holdings of a particular holder should generally be shown on a single row. Your cap table should also be free of extraneous information, formulas, notes, etc. We often see cap tables where it is impossible to quickly determine who owns what because of illogical organization and the inclusion of extraneous information.
  • Tailor Your Cap Table to Your Corporate Documents. If your company is venture backed, then you are almost definitely governed by “protective provisions” that require you to obtain various approvals prior to taking certain actions. For example, let’s say that in order to approve a new financing, your charter requires you to obtain separate consents from (i) a majority of the Series A and B shares together and (ii) a majority of the Series C shares. In this case, your cap table should include columns that separately show you (a) the percentage of Series A and B shares (together) held by each holder and (b) the percentage of Series C shares held by each holder. This will allow you to quickly tell who you’ll need to collect consents from in connection with your new financing. You shouldn’t have to do these calculations from scratch each time you open your cap table.
  • Use Microsoft Excel. Over the life of your company, you are going to need to share your cap table with tons of folks and it should be in a format that is easily accessed and manipulated by others. Google docs is OK, but not everyone uses it and it doesn’t have the full range of handy formulas that Excel has.
  • When in Doubt Ask Your Lawyer for a Sample. You can download a sample simple cap table and sample cap table with pro forma calculations based on new round pricing from Cooley GO Docs. These documents may not be appropriate for your particular circumstances. If you aren’t sure what kind of cap table you need, you should consult with an experienced startup company lawyer.

Written by:

Cooley LLP

Cooley LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.