Glossary - Capitalization Table
A capitalization table (or cap table) is a table providing an analysis of the founders' and investors' percentage of ownership, equity dilution, and value of equity in each round of investment.
Early stage startups typically have a simple capital structure and more limited stakeholder accounting requirements. In the earliest stages of their development, startups may track their shareholders in a simple document or spreadsheet. As more complexity is added there is increased risk of errors or omissions and the use of a dedicated tool such as captable.io becomes neccessary.
Cap tables are widely used by entrepreneurs, venture capitalists, and investment bankers to model and to analyze events such as ownership dilution, issuing employee stock options, or issuing new securities. After several rounds of financing, a cap table can become highly complex.