Cap Table Basics: Track Who Owns Your Startup

Your cap table is the single page that answers a simple question: who owns what in your company? It sounds like admin, but it quietly shapes every fundraising conversation, every hire you offer equity to and every decision you make about dilution. This guide shows you what goes on a cap table, how to build your first one and how to keep it clean as your startup grows.

Hand-drawn line graph on a sheet of paper with a ruler and several pens lying beside it — A cap table starts simple, but it is worth drawing it carefully from day one.

Key takeaways

A cap table lists everyone who owns or may own part of your company: founders, investors, the employee option pool and convertible instruments like SAFEs and notes.
Always show two views: issued ownership (shares that exist today) and fully diluted ownership (as if every option and convertible became shares).
Update it after every equity event, and keep the signed documents that back up each line.
A spreadsheet is fine at the start. Cap table software can help once you have several investors, option grants and conversions to track.

Most founders do not think about a cap table until an investor asks for one. Then they spend a stressful evening digging through emails, old spreadsheets and half-remembered handshake deals, trying to work out exactly how many shares exist and who holds them. It is a fixable problem, and it is much easier to fix when the company is young and the list is short.

The good news: you do not need a finance degree to keep a solid cap table. You need a clear structure, the right documents and a habit of updating it every time ownership changes. Let's walk through it step by step.

What a cap table is and why it matters

A capitalization table, usually shortened to cap table, is a record of your company's ownership. Each row is a holder, such as a founder, an investor or the option pool. The columns show what type of equity they hold, how much, and what percentage of the company that represents.

It matters for more reasons than you might expect:

Fundraising: investors will review your cap table during due diligence. A messy one slows the deal and can raise doubts about how the company is run.
Hiring: when you offer equity to an early employee, you need to know how many options are left in the pool and what a grant really means in percentage terms.
Decisions: votes on major company matters often depend on who holds which shares.
Founder clarity: co-founders who can see the numbers in black and white have fewer awkward surprises later.

Issued vs fully diluted ownership

This is the concept that trips up most first-time founders, so it is worth getting clear on early. Your cap table should show both views side by side.

Issued ownership counts only the shares that actually exist today. If two founders hold all the issued shares, they own 100% between them on an issued basis.
Fully diluted ownership counts everything that could become shares: issued shares, the whole option pool (granted and ungranted), and, where you can estimate it, convertible instruments like SAFEs and notes.

Investors usually talk in fully diluted terms, because that is the realistic picture of who will own what once options are exercised and convertibles turn into shares. If you only look at issued ownership, you will overestimate your own stake.

What goes on a cap table

An early-stage cap table usually has four groups of holders. Even if you only have one of them today, set up the structure for all four so you are not rebuilding the sheet later.

Founders. Each founder's shares, the date they were issued, the price paid and any vesting schedule attached to them.
Investors. Anyone who has bought shares, including angels and early friends and family investors who took equity.
The employee option pool. The number of shares set aside for future grants, split into options already granted and options still available.
Convertible instruments. SAFEs and convertible notes that have not turned into shares yet, with the amount invested and the key terms, such as any valuation cap or discount.

For each line, record more than just a number. Useful details include the share class (for example common or preferred), the certificate or reference number if you use one, vesting start date, and a link to the signed document. If you are unsure how SAFEs and notes differ, our earlier guide comparing SAFEs, convertible notes and priced rounds covers that in more depth.

Common mistake

Leaving out promises that were never written down. If you told an early adviser or a first hire "you'll get some equity," that promise belongs in a notes column now, and it needs to be turned into a proper signed agreement or clearly resolved. Unrecorded promises are one of the most common things that surface during due diligence.

How to build your first cap table

You can build a basic cap table in an afternoon. Gather your documents first, then work through these steps in order.

Collect the paperwork. Find your incorporation documents, share issuance records, founder agreements, any option grants and every SAFE or note you have signed.
List every holder. One row per person or entity, plus one row for the unallocated option pool.
Record the share counts. Use the exact numbers from the signed documents, not rounded figures or what you remember.
Add the issued percentage. Divide each holder's issued shares by total issued shares.
Add the fully diluted percentage. Divide each holder's shares (or options) by the fully diluted total, including the full option pool.
List convertibles separately. Show the amount invested and key terms. Model how they might convert, but label that clearly as an estimate.
Check the totals. Issued shares on your sheet should match your official company records exactly.

Pro tip

Add a "source document" column with a file name or folder link for every row. When an investor or lawyer asks "where does this number come from?", you can answer in seconds instead of hunting through your inbox.

Team of people meeting around a white table in an office with a whiteboard on the wall behind them — A shared, up-to-date cap table keeps co-founders and early team members on the same page.

A simple cap table template

Copy these columns into a spreadsheet. The example below shows a young company with two founders, an option pool and one SAFE. All numbers are made up for illustration.

Holder	Type	Shares issued	Fully diluted shares	% issued	% fully diluted	Source document
Founder A	Common	4,500,000	4,500,000	50%	45%	Founder share agreement
Founder B	Common	4,500,000	4,500,000	50%	45%	Founder share agreement
Option pool (unallocated)	Options	0	1,000,000	0%	10%	Board approval of pool

Below the main table, add a short section for convertibles, with columns for investor name, instrument, amount invested, valuation cap or discount, date signed and a link to the document. In this example, one angel has signed a SAFE for an example amount of $50,000. It does not appear in the share counts yet because it has not converted.

Example

Imagine Sam and Leila, co-founders of a small software startup. They each hold 4,500,000 shares, so they think of themselves as 50/50 owners. When they create a 1,000,000 share option pool to hire their first engineer, their fully diluted stake drops to 45% each, even though nobody has been granted a single option yet. When they later grant 100,000 options to the engineer, the pool row splits into "granted: 100,000" and "available: 900,000," and the fully diluted totals stay the same. Seeing this on paper helps them explain a grant to a candidate in plain numbers. (Names and numbers are made up for illustration.)

The paperwork behind the numbers

A cap table is only as reliable as the documents behind it. A few legal and tax steps link directly to it, and they differ between countries.

In the US

If founders or early team members receive restricted stock that vests over time, an 83(b) election must be filed with the IRS within 30 days of receiving the stock. There is no extension, so it is worth putting a reminder in your calendar the day shares are issued and keeping a copy of the filed election with proof of the date. Note the filing date in your cap table notes column too.

In the UK

UK companies must keep their register of members (the legal list of shareholders) up to date and file confirmation statements at Companies House. Your cap table and your register of members should always agree. For employee equity, EMI (Enterprise Management Incentives) is the main tax-advantaged share option scheme, so many UK startups set up their option pool with EMI in mind.

This section is general information, not legal or tax advice. Equity rules depend on your company structure and location, so speak with a startup lawyer or accountant before issuing shares or options.

Spreadsheet or cap table software?

A spreadsheet in Google Sheets or Microsoft Excel works well while your cap table has a handful of rows. It is free, flexible and easy to share with a co-founder. The risk grows with complexity: formulas break, versions multiply, and it becomes hard to model what happens when several SAFEs convert at once.

Dedicated cap table tools can help once you have multiple investors, regular option grants or a priced round on the horizon. Tools you might look at include Carta, Pulley, Cake Equity and Ledgy. Some focus more on US companies and others serve the UK and Europe, and features such as option grant management, round modeling and investor portals vary. Check current features, pricing and privacy policies before you upload sensitive ownership data.

Whichever route you choose, keep one master version. Two slightly different cap tables floating around is worse than one simple, correct one.

Keeping your cap table clean as you grow

Building the cap table is the easy part. Keeping it accurate takes a small, steady habit. Treat it like your bank reconciliation: something you check regularly, not only when someone asks.

Update it after every equity event: new shares, option grants, exercises, transfers, SAFEs, notes and conversions.
Reconcile with official records: compare it with your company's share register at least once a quarter.
Track vesting: record vesting start dates and schedules so you know what has vested if someone leaves.
Model before you sign: before agreeing to a new round or a large option grant, model the fully diluted result so you understand the dilution.
Limit access: share the full table only with people who need it, such as co-founders, your lawyer and your accountant.
Add it to your data room: when you start fundraising, a tidy cap table with linked documents is one of the first files investors open. Our pre-seed playbook covers what else belongs there.

Common mistake

Only updating the cap table right before a fundraise. By then, small errors have stacked up and nobody remembers the details. A five-minute update after each change saves hours of reconstruction later.

Year-end is a natural moment for a quick review. Before you close the books for the year, check that every grant, SAFE and share issuance from the last twelve months appears on the table and matches its signed document.

Your cap table action plan

Gather incorporation documents, share records, option grants, SAFEs and notes
Create one master cap table with a row for every holder and the option pool
Add both issued and fully diluted percentages
List convertibles separately with their key terms
Link every row to its signed source document
Note any filing deadlines, such as a US 83(b) election or UK confirmation statement
Set a quarterly reminder to reconcile the cap table with official records

Frequently asked questions

When should a startup create a cap table?

As soon as the company issues its first shares. Even with two founders and nothing else, a simple table sets the habit and makes it easy to add investors, options and convertibles later.

Do SAFEs count in fully diluted ownership?

Practice varies. Because a SAFE has not converted yet, many founders show it in a separate section and model its likely conversion as an estimate. Investors may ask to see a version that includes it, so be ready to show both.

Should the unallocated option pool be included?

Yes, in the fully diluted view. Investors generally count the whole pool, granted and ungranted, because those shares are reserved for future team members.

Who should have access to the cap table?

Keep the full version limited to founders, the board, your lawyer and your accountant. Investors usually see it during due diligence, and individual shareholders can be shown their own holdings.

The bottom line

A cap table is your company's ownership map. Record every founder, investor, option and convertible, show both issued and fully diluted ownership, and link each line to the document that proves it. Keep one master version and update it every time something changes.

Spend an afternoon on it now, while the list is short. When an investor asks for your cap table, you will send it with confidence instead of scrambling, and that calm, organized first impression is worth a lot.