Cap Table

What Is a Cap Table?

A cap table (short for capitalization table) is a detailed record of a company’s ownership structure. It outlines who owns equity in the company—including founders, employees, investors, and other stakeholders—and how much of it they hold.

Cap tables typically include:

• Shareholder names and roles
• Number and type of shares (common, preferred, etc.)
• Ownership percentages
• Option pool allocations and vesting schedules
• Convertible notes, SAFEs, or warrants

Early-stage startups and growth-stage companies use cap tables to track dilution, prepare for funding rounds, and structure employee equity offers.

Why Cap Tables Matter

Tracks Company Ownership and Dilution

A clear, up-to-date cap table helps founders, investors, and employees understand how ownership evolves over time.

Informs Equity Compensation Strategy

Helps HR and Finance model how new grants impact existing equity and plan for future growth.

Critical for Fundraising and Due Diligence

Investors review the cap table to evaluate risk, return potential, and control.

Supports Transparency with Employees

Sharing high-level cap table info builds trust and helps employees understand the value of their equity.

Common Challenges with Cap Tables

Manual Errors and Outdated Spreadsheets

Early-stage companies often manage cap tables in Excel, leading to version control issues and data inaccuracies.

Lack of Visibility Across Teams

If HR, Finance, and leadership don’t have access to updated cap table data, equity planning becomes disconnected from reality.

Complex Scenarios Are Hard to Model

Fundraising rounds, exits, or secondary sales can drastically affect ownership—and are hard to calculate manually.

Miscommunication Around Employee Equity

Without clarity, employees may misunderstand what their equity is worth or how dilution impacts them.

Best Practices for Managing a Cap Table

Use Dedicated Cap Table Software

• Tools like Carta, Pulley, or Shareworks reduce error risk and simplify updates.
• Automate grant tracking, vesting schedules, and 409A valuations.

Maintain a Clean and Audit-Ready Record

• Keep all equity events, documents, and approvals organized.
• Update the cap table immediately after each round or equity change.

Integrate Cap Table Visibility into Compensation Tools

• Platforms like CandorIQ can pull in cap table data to model equity offers and refreshes.
• Helps HR and Finance understand equity impact in real time.

Educate Employees on Equity Basics

• Offer sessions or materials explaining ownership percentages, dilution, and exit scenarios.
• Empower employees to understand the value of their total rewards.

Cap Table vs. Option Pool

While the cap table shows all company ownership, the option pool refers specifically to the percentage of equity set aside for future employee grants.

Cap Table

• Tracks full company ownership
• Includes founders, investors, and employees
• Changes with each funding round
• Drives dilution analysis

Option Pool

• Subset of shares for employees
• Usually part of preferred equity negotiations
• Can be replenished as needed
• Impacts hiring and retention strategy

The Bottom Line

A well-maintained cap table is critical for making informed decisions around equity, compensation, fundraising, and company growth. When integrated with your compensation planning tools, it helps HR, Finance, and leadership align on equity strategy—and build a company where everyone understands their stake.