What Is a Capitalization (Cap) Table?

A capitalization table is a detailed breakdown, typically in spreadsheet or table form, of a company's ownership structure, outlining who holds equity and in what proportion. It's also known as a cap table and is most commonly used for startups and early-stage businesses, but all types of companies can use it ᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚas well.

Cap tables often include all of a company’s equity ownership capital, 🍸such as common equity shares, preferred equity shares, warrants, and convertible equity.

Understanding a Cap Table

A basic capitalization table lists each type of equity ownership capital, the individual investors, and the share prices. A more complex table may also include details on potential new funding sources, mergers and acquisitions, public offerings, or other hypothetical transactions. Capitalization tables are typically used privately by private companies to provide information on a company’s investors and market value.

Here's an example:

A capitalization table shows the 澳洲幸运5官方开奖结果体彩网:total market value of a company and its componen🌠ts. It's considered a key point of reference for business managers in every financial decision that has an impact on market capitalization and the company’s market value.

It's important for the capitalization table to be accurate, customized to the business's needs, and regularly maintained for decision-making based on the most current information.

Creating and Maintaining a Cap Table

A cap table can be viewed in conjunction with the shareholders’ equity portion of the balance sheet, which also details the equity capജital structuring of a firm.

The capitalization table shows each investor’s equity capital stake in the business, which is calculated by multiplying the share price by the number of shares owned. The names 🧜of the security owners will be listed on the y-axis in most cases, and the types of securities will ap🅘pear on the x-axis. All holdings of each investor should be in a single row.

The listing of 澳洲幸运5官方开奖结果体彩网:investors can be done in a few ways and may depend on the targeted audience. Some cap table⭕s may list investors by founders first, followed by executives and key employees with equity stakes, then other investors such as angel investors, venture capital firms, and others who are involved in the business plan.

A 𒊎capitalization table may choose to list investors in descending order by ownership, showing the largest holders at the top, instead.

Special Considerations

Companies constantly evolve, so their capitalization tables must be continuously updated. Startups run several funding rounds to support capital needs. They also issue 澳洲幸运5官方开奖结果体彩网:stock options to attract talent. All the💧se actions change the capitalꦆization table.

Terminating options when an e🍰mployee leaves the business can also alter the table, as can letting options expire, having an investor exercise vested options, or havinꦿg an investor redeem, transfer, or sell shares.

The Bottom Line

A capitalization or cap table is a spreadsheet or table that shows a company’s equity capitalization. It’s generally an intricate breakdown of a company’s shareholders’ equity. Capitalization tables are typically used privately by private companies to provide information on a company’s investors and market value.