How to make a cap table
You can use a spreadsheet program, such as Excel or Google Sheets, to create a table. This needs to display your company information below in a clear and organized manner. Some of the key elements are detailed below.
- Investor information is a critical component of a cap table. This section lists details of all investors in the company. It includes the name, number of shares and the percentage of ownership held. It may also include information about the type of securities held by each investor, such as preferred stock or common stock.
- Founder information is another essential element of a cap table. This section includes the names of the company's founders and the number of shares they hold. Founders often hold a large share of the company's ownership. This stake has a great influence on the company's decision-making and strategic direction.
- Stock value includes the price paid for each share of stock, as well as the current value of the stock. This information is used for two purposes. Firstly, to calculate the total value of the company. Secondly, to calculate the value of each shareholder's ownership stake.
A cap table can also include the following elements:
- The date of each stock issuance
- Any restrictions or limitations on the sale of shares
- Any outstanding stock options or warrants.
Cap table example
Let's take a look at a very simple example cap table to illustrate how they work. If you're wondering how to read a cap table, looking at the below you can read from left to right to see each individual shareholders information, or with a summary row added to the bottom of the numerical columns, you can see at a glance the total for each column.
In this example, John Smith owns 50% of the company, Jane Doe owns 25%, and ABC Ventures owns 20%. The "Other" category represents any other shareholders who may own a small percentage of the company.
This level of detail can be maintained in a spreadsheet; how to build a cap table like this is pretty self-explanatory. You will, however, need to include a lot more information to make this document useful as your business grows.
Cap table template
When you're just getting started, it can be helpful to start with a cap table template and then build it out for your company. There are a number of free templates available online; a template can help you get started and ensure that you include all the necessary information. This template from Carta is a good place to start.
The trouble with Excel-based templates is that they don't scale with you as your company grows and can become difficult to manage once things begin to get complicated. Cap table software can help companies which have evolved a complicated ownership situation to keep accurate track of this vital information and all its intricacies.