Capital & Financing
What Is a Cap Table?
A cap table, or capitalization table, is the master list of every equity-related security in a company and who holds it, including common stock, preferred stock, options, SAFEs, warrants, and convertible notes. It tracks both issued shares outstanding right now and fully diluted shares assuming every convertible converts. A founder with 6M common shares, 3M investor preferred, and a 1M option pool shows 9M issued and 10M fully diluted.
A cap table (capitalization table) is the master list of every equity-related security in your company and who holds them. Common stock, preferred stock, employee options, Simple Agreements for Future Equity (SAFEs), warrants, convertible notes, all of it. Tracks both issued shares (outstanding right now) and fully diluted shares (assuming every convertible converts).
What goes on a cap table
- Common stock (founders, employees who exercised options)
- Preferred stock (investors from priced rounds, e.g., Series A, B, etc.)
- Options pool (granted plus ungranted, vested plus unvested)
- SAFEs (pre-conversion)
- Convertible notes (pre-conversion)
- Warrants (sometimes attached to debt or buy-now-pay-later deals)
Issued vs fully diluted
A founder owns 6M common shares. The company has issued 3M preferred shares to investors and granted 1M options (of which 600K are vested). Issued shares = 9M (founder common plus investor preferred). Fully diluted = 10M (add the full option pool, vested and unvested).
If a SAFE converts at the next round into 500K shares, fully diluted becomes 10.5M. The founder's percentage drops on a fully diluted basis even though their absolute share count is unchanged.
Cap table tools
- Spreadsheet: viable up to roughly 15 to 20 holders
- Carta: industry standard for venture-backed brands
- Pulley, AngelList Roll Up Vehicles: simpler alternatives
- LTSE Equity, Capshare: budget options
The most common mistake
Tracking the cap table in 6 different places: the founder's spreadsheet, the lawyer's records, individual investor records, Carta. A single source of truth is non-negotiable. When you fundraise or sell, diligence teams reconcile everything to one number, and mismatches absolutely kill deals.
Frequently Asked Questions
what's a cap table in plain english?
The master list of every equity-related security in your company and who holds them: common, preferred, options, SAFEs, warrants, convertible notes.
issued vs fully diluted, what's the difference?
Issued = outstanding right now. Fully diluted = everything including unconverted options, SAFEs, and convertible notes. Fully diluted is the number for almost every decision.
how does a messy cap table hurt me when i raise money?
Diligence delays, surprise dilution discovered late, and valuation discounts from investors who don't trust the math.
Related Terms
Browse the full ecommerce finance glossary for every metric and money term a DTC operator needs.
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