Last updated: 2 November 2026
A cap table is a detailed record of who owns equity in your company and how much they own. It tracks every share, option grant and convertible, and shows ownership both issued and fully diluted.
What is a cap table?
A cap table is a master spreadsheet that tracks every share, option grant and convertible. It is a detailed record of who owns equity in your company and how much they own. In practice, it becomes the reference point for founders, investors and advisers whenever ownership is discussed. It should be kept accurate, because later funding, hiring and exit decisions all depend on it.
The table is not just a list of names. It records the legal and economic position of each holder, including the type of equity, the share class and any conditions attached. A well-run company keeps one version that everyone trusts, rather than several spreadsheets that disagree.
What columns does a cap table need?
A cap table needs columns for shareholder name, equity type, number of shares, share class, ownership percentage, vesting schedule, grant date and exercise price. These fields cover the basic facts needed to identify who holds what and on what terms. Vesting schedule and grant date matter because ownership can change over time as shares vest or options are exercised.
Ownership percentage should be calculated on a consistent basis, usually both on an issued basis and on a fully diluted basis. If the basis is not stated, two readers can reach different conclusions from the same table. Keeping the columns complete also helps when the company prepares filings or due diligence packs.
What does “fully diluted” mean?
Fully diluted means the total shares if all securities converted. It includes outstanding common shares, outstanding preferred shares, all granted options, all warrants, and converted SAFEs and notes. Another guide also counts the whole unallocated pool, putting it as counting every share that exists or has been promised.
A simple example shows why this matters. Two founders hold 4,000,000 shares each, and a 1,000,000-share pool is created. Outstanding shares stay at 8,000,000, while fully diluted shares become 9,000,000. Each founder falls from 50% to 44.4% without selling anything. The arithmetic is 4,000,000 divided by 9,000,000, which equals 44.4%. This is dilution: the same number of shares, but a smaller slice of the larger total.
Worked example: before and after a round
A guide example starts with founders holding 10,000,000 common shares, or 80%, and an option pool of 2,500,000 shares, or 20%. The total before the round is 10,000,000 plus 2,500,000, which equals 12,500,000 shares.
After a $2M seed at a $10M post-money valuation, investors take 20%, equal to 3,125,000 shares. The new total is 12,500,000 plus 3,125,000, which equals 15,625,000 shares. The founders then hold 64%, the pool 16%, and investors 20%. The founders’ percentage is 10,000,000 divided by 15,625,000, which equals 64%. The pool’s percentage is 2,500,000 divided by 15,625,000, which equals 16%.
| Item | Before | After |
|---|---|---|
| Founders’ common shares | 10,000,000 (80%) | 10,000,000 (64%) |
| Option pool | 2,500,000 (20%) | 2,500,000 (16%) |
| Seed investors | 0 | 3,125,000 (20%) |
| Total shares | 12,500,000 | 15,625,000 |
This table shows why a round changes percentages even when existing holders do not sell. The investor’s 20% comes from new shares, so the founders and pool shrink in percentage terms while their share counts stay the same.
How are SAFEs and notes shown?
SAFEs and notes are tracked separately, with investor name, amount, valuation cap, discount rate, and a pro forma conversion showing ownership if converted at the current valuation. This keeps unconverted instruments visible without pretending they are already shares.
On a post-money SAFE, investor ownership percentage equals investment divided by post-money valuation cap. As a computed example, £250,000 on a £5,000,000 post-money cap equals 5.0%. This is a simple conversion model and should be updated when the valuation or cap changes.
Common mistakes
Common mistakes include not documenting vesting, making undocumented equity promises, miscalculating fully diluted ownership, not updating the table after funding events, having too many small investors, missing valuations, and having no dilution modelling. Each mistake can make the company look less organised during a fundraise or exit.
Undocumented promises are especially risky because they may not appear in the table but can still create claims against the company. Missing valuations can make it unclear what an instrument is worth. No dilution modelling means founders may not see the effect of a new round until it is signed.
How to keep it clean (ours)
Keep one owner for the cap table, update it after every issue or transfer, reconcile it with the register of members and Companies House filings, and model the next round before negotiating. This is practical housekeeping rather than a legal rule, but it reduces errors.
Reconciliation matters because the cap table and the statutory register should tell the same story. Modelling the next round before negotiating helps founders understand dilution, pool size and investor ownership before terms are agreed. Readers should check HMRC guidance or take advice where tax matters arise.
Frequently asked questions
What is a cap table in simple terms?
A cap table is a detailed record of who owns equity in your company and how much they own. It tracks every share, option grant and convertible.
Why does fully diluted ownership matter?
Fully diluted ownership counts all shares that exist or have been promised if every security converts. It stops a company from overstating any holder’s percentage by ignoring options, warrants, SAFEs or notes.
How do you read a worked example?
You compare share counts before and after the round, then divide each holder’s shares by the new total. In the example, 10,000,000 divided by 15,625,000 equals 64% for the founders.
How is a post-money SAFE shown?
A SAFE is tracked separately with investor name, amount, valuation cap, discount rate and a pro forma conversion. On a post-money SAFE, ownership equals investment divided by post-money valuation cap, such as £250,000 on a £5,000,000 cap giving 5.0%.
What mistakes should founders avoid?
Founders should avoid undocumented equity promises, missing vesting records, miscalculated fully diluted ownership and failure to update after funding events. They should also avoid having no dilution modelling before a new round.
Sources
Figures and prices were checked on 2 November 2026; check the linked sources before relying on them. This article is general information, not tax, legal or investment advice.
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