{"concept_id":"ALTSS-VC-030","slug":"cap-table-capitalization-table","canonical_name":"Capitalization Table","aliases":["cap table","capitalisation table"],"kind":"document","authority":"industry","facets":["SHR"],"domains":["VENTURE"],"display_title":"Cap Table (Capitalization Table)","search_aliases":["what is a cap table","cap table example","pro forma cap table series a","fully diluted cap table","how to read a cap table"],"one_sentence_definition":"A capitalization table (cap table) is a schedule of a company's securities and their holders, covering common and preferred shares, options, warrants and convertible instruments, that shows each holder's ownership on an issued and a fully diluted basis.","plain_english":"A cap table answers \"who owns what, and on what terms\". It lists every class of shares and every right to acquire shares, who holds them, and what percentage each holder would own if everything converted. Investors use it to price rounds, to model dilution and to work out who gets paid what in a sale.","parent_concepts":["venture-capital"],"child_concepts":["fully-diluted-shares","option-pool"],"related_concepts":["dilution","safe-simple-agreement-for-future-equity","liquidation-preference","pre-money-and-post-money-valuation","priced-round","preferred-stock"],"comparison_concepts":[],"not_the_same_as":[{"slug":"fully-diluted-shares","distinction":"Fully diluted shares is one counting basis used in a cap table; the cap table is the full schedule of holders and securities."},{"slug":"waterfall","distinction":"A fund distribution waterfall allocates fund proceeds between LPs and GP; a cap table and its exit waterfall allocate company proceeds between share classes."}],"formula_ids":[],"worked_examples":[{"title":"Illustrative pro forma, step 1: the SAFE converts","paragraphs":["Founders hold 9,000,000 shares and employees hold 1,000,000 granted options: 10,000,000 fully diluted. An investor holds a $1.5m post-money SAFE with a $15m cap (10%). At the Series A it converts at **$1.35** into **1,111,111** shares, so the pre-round fully diluted count is 11,111,111."],"calc":{"fn":"post_money_safe","inputs":{"purchase_amount":1500000,"post_money_cap":15000000,"pre_safe_capitalization":10000000},"expected":{"conversion_price":1.35,"safe_shares":1111111.1111,"company_capitalization":11111111.1111},"tol":0.01}},{"title":"Illustrative pro forma, step 2: Series A with a new pool","paragraphs":["The Series A invests $6m at a $24m pre-money valuation and requires a new option pool equal to 10% of post-money shares, created before the round. The pool is **1,587,302** shares, the price is **$1.89** and the investor receives **3,174,603** shares. Post-money is $30m.","| Holder | Before Series A | % | After Series A | % |\n|---|---|---|---|---|\n| Founders | 9,000,000 | 81.0 | 9,000,000 | 56.7 |\n| Granted options | 1,000,000 | 9.0 | 1,000,000 | 6.3 |\n| SAFE (converted) | 1,111,111 | 10.0 | 1,111,111 | 7.0 |\n| New option pool | - | - | 1,587,302 | 10.0 |\n| Series A | - | - | 3,174,603 | 20.0 |\n| Total | 11,111,111 | 100.0 | 15,873,016 | 100.0 |","The SAFE holder paid $1.35 per share and the Series A $1.89. Founders went from 90% (before the SAFE) to 56.7%."],"calc":{"fn":"option_pool_shuffle","inputs":{"pre_money":24000000,"investment":6000000,"existing_fd_shares":11111111.111111,"target_pool_post":0.1},"expected":{"pool_shares":1587301.5873,"price_per_share":1.89,"investor_shares":3174603.1746,"post_shares":15873015.873},"tol":0.01}}],"sections":[{"heading":"What a cap table records","paragraphs":["For each class or series: the holders, the number of shares, the original issue price, the liquidation preference and conversion ratio for preferred stock, and any special rights. For equity awards: options and restricted stock granted under the plan, with exercise prices and vesting, and the unallocated pool. For other rights: [warrants](/glossary/warrant) with exercise prices, and [SAFEs](/glossary/safe-simple-agreement-for-future-equity) and [convertible notes](/glossary/convertible-note) with their caps, discounts and, for notes, accrued interest. Unconverted instruments are not shares yet, so a good cap table shows them separately and models their conversion rather than leaving them out."]},{"heading":"Three ways to count","paragraphs":["Issued and outstanding counts only shares actually issued. As-converted treats preferred stock as converted into common. [Fully diluted](/glossary/fully-diluted-shares) adds every share that could be issued under existing rights: options, the unallocated pool, warrants and, where they can be computed, converting SAFEs and notes. Investors price rounds and quote ownership on a fully diluted basis; voting usually follows shares outstanding on an as-converted basis. A percentage without its basis is ambiguous."]},{"heading":"Legal record versus model","paragraphs":["The legal record of who owns shares is the company's stock ledger or share register, supported by share certificates or book entries and board approvals. The cap table is a summary and a model built from those records. Discrepancies between the two, such as unapproved grants, missing board consents, or promised equity that was never documented, are a routine finding in legal [due diligence](/glossary/due-diligence) and are usually fixed before a round closes."]},{"heading":"Pro forma cap tables and waterfalls","paragraphs":["A pro forma cap table shows the company after a proposed transaction: a new round, conversion of instruments, a pool increase or a secondary sale. It is how the price per share, investor ownership and founder dilution are agreed. The same data, with each class's preference and seniority, drives the exit waterfall that shows how sale proceeds are split (see [liquidation preference](/glossary/liquidation-preference)), and the allocation of equity value across classes in fair value work."]},{"heading":"What investors look for","paragraphs":["Common problems in diligence include stacked SAFEs or notes with different caps whose conversion has not been modelled, repeated insider bridges, a large liquidation preference overhang relative to likely exit values, repeated pool increases pushed onto existing holders, departed founders holding large unvested or unrestricted stakes, and undocumented promises of equity. For LPs, managers' reporting of fully diluted ownership by company is the basis for checking reserve plans and concentration."]}],"classification_rules":[],"calculation_rules":[],"common_mistakes":["Quoting ownership without saying whether it is issued, as-converted or fully diluted.","Leaving unconverted SAFEs and notes off the cap table.","Treating the cap table as the legal record of ownership.","Assuming percentage ownership determines sale proceeds; preferences and seniority change the split."],"edge_cases":["Mixed pre-money and post-money SAFEs must be converted jointly; the order of calculation changes the result.","Early-exercised options and restricted stock subject to repurchase are outstanding shares but may still be unvested.","Shares held in escrow or subject to clawback in an acquisition remain on the cap table until released."],"external_standard_mappings":[],"source_ids":["SRC-NVCA-MODEL-DOCS","SRC-YC-SAFE"],"citations":[{"source_id":"SRC-YC-SAFE","pinpoint":"Post-money SAFE conversion mechanics","supports":"SAFE conversion in the pro forma example","source":{"source_id":"SRC-YC-SAFE","title":"Y Combinator SAFE (post-money) documents and SAFE User Guide","authors":"Y Combinator","publisher":"Y Combinator","document_type":"template","url":"https://www.ycombinator.com/documents","year":2018,"publication_date":"Post-money SAFE introduced 2018","jurisdiction":"US","status":"Current","last_verified":"2026-10-01"}},{"source_id":"SRC-NVCA-MODEL-DOCS","pinpoint":"Stock Purchase Agreement (capitalization representation and schedule)","supports":"Cap table content represented by the company at a financing","source":{"source_id":"SRC-NVCA-MODEL-DOCS","title":"NVCA Model Legal Documents","authors":"National Venture Capital Association","publisher":"NVCA","document_type":"template","url":"https://nvca.org/model-legal-documents/","year":2026,"publication_date":"Certificate of Incorporation, Stock Purchase Agreement, Investors' Rights Agreement updated October 2025; Voting Agreement June 2026; ROFR and Co-Sale April 2026; Management Rights Letter and Indemnification Agreement July 2020","jurisdiction":"US","status":"Current","last_verified":"2026-10-01"}}],"faq":[{"q":"What is the difference between issued and fully diluted shares?","a":"Issued shares exist today. Fully diluted shares add all shares that could be issued under options, the unallocated pool, warrants and convertible instruments."},{"q":"Who maintains the cap table?","a":"The company, usually its finance team or counsel, often in cap table software. Investors keep their own copies and reconcile them at each financing."}],"seo":{},"first_published":"2026-01-04","last_reviewed":"2026-10-01","last_modified":"2026-10-01","content_version":"2.0.0","url":"https://altss.com/glossary/cap-table-capitalization-table","json_url":"https://altss.com/reference/concepts/cap-table-capitalization-table.json","title":"Cap Table (Capitalization Table)","formulas":[],"sources":[{"source_id":"SRC-NVCA-MODEL-DOCS","title":"NVCA Model Legal Documents","authors":"National Venture Capital Association","publisher":"NVCA","document_type":"template","url":"https://nvca.org/model-legal-documents/","year":2026,"publication_date":"Certificate of Incorporation, Stock Purchase Agreement, Investors' Rights Agreement updated October 2025; Voting Agreement June 2026; ROFR and Co-Sale April 2026; Management Rights Letter and Indemnification Agreement July 2020","jurisdiction":"US","status":"Current","last_verified":"2026-10-01"},{"source_id":"SRC-YC-SAFE","title":"Y Combinator SAFE (post-money) documents and SAFE User Guide","authors":"Y Combinator","publisher":"Y Combinator","document_type":"template","url":"https://www.ycombinator.com/documents","year":2018,"publication_date":"Post-money SAFE introduced 2018","jurisdiction":"US","status":"Current","last_verified":"2026-10-01"}]}