Cap table.
aka capitalisation table, ownership table
Who owns what percentage of the company, in one spreadsheet.
What it actually means
A cap table is the list of everyone who owns a piece of a company (founders, investors, employees with options) and exactly how much each of them holds. It shows ownership today and how it would change after a new investment.
At day one it is boring: two founders, 50% each. Then it gets interesting. An angel investor buys 10%. An option pool of 12% is set aside for future employees. A seed fund buys 18%. Each row is a person or fund, each column is a round, and the bottom line is always 100%.
The cap table is the single source of truth for one of the most emotional questions in business: how much of this is mine? It is also the first document a serious investor or acquirer asks for, because it tells them who they are really dealing with and whether anything strange happened on the way.
Where you'll hear it
You’d get 0.25% on a four-year vest. Here is the cap table so you can see what that is a quarter of a percent of, including the option pool.
Translation: here is the real number, not a vibe. Good founders show the table. Vague ones show nothing.
Lawyers mention it in every fundraise, investors ask for it before the first meeting, and employees should ask about it before accepting equity. “What does the cap table look like?” is a completely normal question. Being told it is confidential is a signal in itself.
The pop-culture version
Four people wrote the track. The split sheet says who gets what share of the royalties: 40% to the one who wrote the hook, 25% each to two others, 10% to the drummer who added the bridge. Every time the song earns a dollar, the sheet decides where it goes.
A cap table is the split sheet for a company. Founders, investors and employees each have a line. When the company gets sold or pays a dividend, the table decides who gets paid and how much. The arguments happen when the sheet was never written down, or when someone added a verse and expected the split to change on its own.
The grown-up version adds complexity: different share classes, preference stacks, convertible notes that have not turned into shares yet. All of it is still the same question the band is asking: who owns how much, and what happens when the money shows up?
Say it like you mean it
“After the seed round, founders hold 64% fully diluted, with a 12% pool.”
“Fully diluted” means including every option and note, which is the number that matters.“I own 10% of the company.”
10% of what? Before or after the option pool? Before or after the next round? Without the cap table, the percentage is a feeling.“Fully diluted” is the phrase that separates people who have read a cap table from people who have not. It means: count every share that could exist if all options and convertible notes were exercised. That is the real denominator.
Share classes, option pools, convertibles and how the table changes round by round, with worked examples.
Decoded next
Decoded by the Kurums editorial team. Kurums Decoded translates the language of business for people who are new to it. Definitions are kept short on purpose; the serious version above goes deep. Nothing here is financial, legal or career advice.
Discover more from Kurums | Business Intelligence
Subscribe to get the latest posts sent to your email.