cap table

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A cap table shows who owns what in a startup. It tracks shares, options, and ownership across founders, investors, and employees. It’s essential for understanding dilution and control after each funding round.

Cap table is short for capitalization table. It details who owns how much of a company, in what form, and at what stage. It tracks shares, options, SAFEs, convertible notes, and everything else that shapes the ownership structure of a business.

More than a spreadsheet, it’s a strategic tool. It helps founders plan funding, forecast dilution, and understand control. Investors look at it before signing checks. Operators use it to assess incentives and long-term value.

In a startup, equity is currency. This concept is the ledger.

Why ownership tracking matters at every stage

Early on, a simple cap table might show just two founders splitting equity. But things change fast. With each round—angel, seed, Series A—the table evolves. Investors come in. Option pools expand. Founders dilute.

Without visibility, it’s easy to lose control. A lopsided table can block future funding or weaken strategic decisions. Clean cap tables signal discipline. Messy ones raise red flags.

Understanding how equity shifts over time isn’t just admin—it’s survival.

What cap tables don’t tell you

They don’t show value. A person with 5% might have a paper gain—or nothing.

They don’t show alignment either. Equal ownership doesn’t guarantee equal effort.

And they don’t replace planning. A good cap table reflects thoughtful design. A bad one reflects panic.

Make the cap table a decision tool, not just a record.

Cap table clarity isn’t optional—it’s how smart teams manage growth. If you don’t know who owns what, and why, you’re flying blind.

Ownership drives incentives. Incentives shape behavior. And behavior compounds over time.

Get the table right. Everything else depends on it.

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