# Capitalization Table

## Quick Definition

A document showing company ownership, including all shareholders, share counts, ownership percentages, and security terms.

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## What is a Capitalization Table?

A capitalization table (cap table) is a spreadsheet showing who owns what percentage of your company. It lists all shareholders, their share counts, ownership percentages, and the terms of their securities.

Cap tables start simple with just founders. As you raise money, grant options, and issue SAFEs or notes, they become increasingly complex.

## Why Cap Tables Matter

Your cap table determines who gets paid in an exit and in what order. Liquidation preferences, participation rights, and conversion terms all affect the waterfall of proceeds.

Investors scrutinize cap tables before investing. They want to understand existing obligations, founder ownership, and whether the structure is clean or complicated.

## Cap Table Best Practices

Keep it clean and updated. Use cap table software rather than spreadsheets. Understand fully diluted ownership. Model future rounds to see how your percentage changes. Some founders prefer a [platform that integrates cap table with bookkeeping](/content/compare/futureproof-vs-pilot/index.html) so equity and financial data stay connected.

### Formula

Ownership % = Shares Owned ÷ Total Shares Outstanding

Fully Diluted Shares = Outstanding + Options + Warrants + Convertibles

### Example

Post-Series A cap table:

- Founders: 6,000,000 shares (60%)
- Series A Investors: 2,500,000 shares (25%)
- Option Pool: 1,000,000 shares (10%)
- Angel Investors: 500,000 shares (5%)

Total: 10,000,000 shares (100%)

Fully diluted includes unexercised options in the pool.

## Related Terms

[**Dilution**  
  The reduction in ownership percentage when new shares are issued, occurring during funding rounds and equity grants.  
  Learn more](/content/terms/dilution/index.html)

[**Option Pool**  
  A percentage of company equity reserved for future employee stock option grants, typically 10-20% of fully diluted shares.  
  Learn more](/content/terms/option-pool/index.html)

[**Fully Diluted Shares**  
  The total number of shares that would exist if every option, warrant, and convertible instrument were exercised.  
  Learn more](/content/terms/fully-diluted-shares/index.html)