What are Cap Tables? A Complete Guide for Startups

Whether you're a founder preparing for your first round of funding or an investor evaluating ownership dynamics, one tool sits at the center of every startup's journey: the cap table.

In this live blog, we break down what a cap table is, why it matters, how to build one from scratch, and how to manage it like a pro.

What is a Cap Table?

It details:

• Shareholders

• Number and type of shares

• Equity percentages

• Convertible instruments (SAFEs, Notes)

• Option pools

• Valuation events

Why it matters:

• Essential during fundraising & due diligence

• Tracks dilution across funding rounds

• Used for modeling exits or IPO scenarios

Structure of a Cap Table

Think of the cap table as a dynamic spreadsheet — but smarter.

At the Seed stage, it's a simple list of:

• Founders and their shares

• Pre-seed investors

• Equity pool (optional)

By Series A, it includes:

• Preferred shares (Series Seed, A)

• Convertible instruments converted

• Option grants and exercises

• Price per share and valuation history

As the company matures, this document becomes critical for:

• Strategic planning

• Stakeholder transparency

• Regulatory compliance

Key Components of a Cap Table

Here’s what most cap tables include:

1. Ownership Details

• Names of all shareholders

• Number of shares

• Equity percentages

• Roles (Founder, Investor, Employee, Advisor)

2. Types of Securities

• Common stock – Founders, early employees

• Preferred stock – Investors with privileges

• Stock options – For employees and advisors

• Warrants – Promised shares to external parties

• SAFEs / Notes – Convert to equity in future rounds

3. Share Classes

• Example: Class A Common, Series Seed Preferred

• Each has different rights (e.g. voting, liquidation)

4. Transaction History

• All funding events

• Option grants & exercises

• Share transfers

• Secondary sales

5. Valuation & Price Data

• Pre/post-money valuation

• Price per share (e.g., $1.50 Series A)

• 409A valuation for stock options

6. Dilution Modeling

• Forecasts dilution across future rounds

• Key for founder/investor negotiations

7. Exit Scenarios

• Shows payouts under M&A, IPO, or liquidation

• Especially important for preferred shareholders

Common Formats of Cap Tables

• Spreadsheet (Excel/Google Sheets):
  Best for early stages. Lightweight, manual.

• Cap Table Software (Carta, Pulley, Plox):
  Automates grants, tracking, dilution modeling, and compliance.

Plox offers built-in cap table tools tied to your investor data rooms — allowing investors to quickly understand who owns what without leaving the platform.

How to Create a Cap Table

1. Start With the Basics

Collect:

• Authorized shares (e.g. 10M)

• Issued shares

• Shareholder details

• SAFEs or Notes (if any)

2. Add Founders’ Equity

E.g.

3. Add Investors

Track by:

• Round (e.g. Pre-Seed, Seed, Series A)

• Share class (e.g. Series A Preferred)

• Total shares and price paid

4. Add Option Pool

Typically 10–20% reserved. Track:

• Granted vs ungranted

• Vesting schedules

Cap Table Example

Here’s a simplified example post-Seed round:

Total: 10,000,000 shares

Cap Table Management Best Practices

• Maintain Accuracy: Always match legal docs

• Update Regularly: Every grant or raise

• Plan for Dilution: Simulate round impacts

• Use Software: Avoid Excel errors

• Stay Compliant: 409A, SEC, IRS compliance

• Access Control: Keep it secure yet accessible

Tools for Cap Table Management

With Plox, share your cap table with investors securely — track views, see what they spent time on, and control access instantly.

In Summary

A well-structured cap table is a non-negotiable asset for every startup. It reflects your company’s DNA — who owns what, how things evolve, and what happens when big decisions are made.

Managing it smartly means fewer headaches during fundraising, better investor conversations, and long-term clarity for everyone involved.

Bonus: Want to impress VCs during fundraising?

Use Plox to:

• Share your cap table securely

• Track who opened it and what they viewed

• Bundle it with your pitch deck and financials

• Make your data room investor-ready in minutes