Nivi · June 19th, 2007
Summary: A cap table lists who owns what in a startup. It calculates how the option pool shuffle and seed debt lower the Series A share price. This post includes a fill-in-the-blank spreadsheet you can purchase to create your own cap table.
A capitalization (cap) table lists who owns what in a startup. It lists the company’s shareholders and their shares.
This screencast walks you through our cap table:
The cap table is free
We used to charge for the stuff but now it’s free.
“This is great; we (probably like many other entrepreneurs) tried our hand at hacking up a similar spreadsheet on our own but this is a far more flexible and easy way of visualizing various scenarios. Thanks for putting this together.”
– Drew Houston, Founder of Dropbox
The cap table shows you what you really own
Many entrepreneurs think their pre-money valuation determines their percentage ownership of the company. They forget about the option pool shuffle. They forget about seed debt and its discount. Then they blame their lawyers.
Use this cap table to sketch out how much you will really own after the financing. Find something else to blame on your lawyers.
This cap table is simplified
Our cap table includes the major economic levers of a Series A: common stock, preferred stock, options, and convertible debt. It doesn’t include warrants, vesting, debt interest, liquidation preferences, dividends, the Series B, et cetera.
Cap tables can be a little tricky to understand if you’ve never worked with one before. So we kept it simple.
Your lawyer or accountant will deal with the details that aren’t included in this cap table. They will maintain the company’s official cap table.
Disclaimer — read this
Use this spreadsheet to learn more about cap tables and what your cap table might look like. Then hire a lawyer to maintain the company’s official cap table.
This cap table is provided as-is, with no warranties. It is not legal advice. We make no representations that this cap table is accurate in any way or is fit for any purpose.
We do not take responsibility for anything that results from using this cap table, including, but not limited to, losing all your money and going to jail.
We are not lawyers. Get a lawyer.
Do you have any suggestions or questions?
Please leave your suggestions and questions in the comments and we’ll improve the cap table.