Cap tables
Cap tables: what they are and how to keep one that survives diligence
A cap table is the record of who owns a company and on what terms: shares by class, options granted and reserved, warrants, and convertible instruments that have not converted yet. A cap table is useful only if it is derived from transactions — issuances, transfers, grants, exercises and cancellations — rather than typed into cells, because that is the version diligence will test.
What belongs on a cap table
| Layer | What it records | Common failure |
|---|---|---|
| Shares | Every issuance by class, date, price and holder | Only the latest position is kept, not how it arose |
| Options | Grants, vesting schedules, exercises, lapses, and the unissued pool | Pool tracked in HR, never reconciled to the register |
| Warrants | Holder, trigger, exercise price, expiry | Forgotten until an exit |
| Convertibles | SAFE and note terms: cap, discount, interest, maturity | Modelled as if they convert at the round price |
| Transfers | Secondary sales, buy-backs, approvals | Recorded in email rather than the register |
Shares
- What it records
- Every issuance by class, date, price and holder
- Common failure
- Only the latest position is kept, not how it arose
Options
- What it records
- Grants, vesting schedules, exercises, lapses, and the unissued pool
- Common failure
- Pool tracked in HR, never reconciled to the register
Warrants
- What it records
- Holder, trigger, exercise price, expiry
- Common failure
- Forgotten until an exit
Convertibles
- What it records
- SAFE and note terms: cap, discount, interest, maturity
- Common failure
- Modelled as if they convert at the round price
Transfers
- What it records
- Secondary sales, buy-backs, approvals
- Common failure
- Recorded in email rather than the register
Issued, outstanding and fully diluted
Three ownership percentages exist for every holder, and they are not the same number. Issued counts shares actually registered. Outstanding excludes treasury shares. Fully diluted assumes every option, warrant and convertible has become a share. Investors negotiate on the fully diluted basis, so that is the number to quote and to plan against.
Building your first cap table
- 1List the founding shares by holder and class, with the issue date and price paid.
- 2Add every subsequent issuance in date order, so the running total reconciles to the statutory register.
- 3Add the option pool: authorised size, granted, exercised, lapsed and unallocated.
- 4Record every outstanding SAFE and note with its cap, discount and any interest.
- 5Reconcile the fully diluted total against signed documents before you quote a percentage to anyone.
When a spreadsheet stops working
- More than one share class, so preference and conversion behaviour matters.
- An option pool with real grants, vesting and leavers.
- Two or more outstanding convertibles that interact at conversion.
- Investors asking for their own view of the position.
- A round in progress, where every scenario needs to be modelled against the same base.
Prepared by Perseids for general information. It is not legal, tax or investment advice — confirm your specific situation with your advisers.
Frequently asked questions
- What is the difference between a cap table and a shareholder register?
- A shareholder register is the statutory record of legal share ownership. A cap table is the management view: it includes the register plus options, warrants and convertibles, so it shows the ownership that will exist rather than only the ownership that exists today.
- How often should a cap table be updated?
- At the point of each event — an issuance, grant, exercise, transfer or conversion — rather than in a pre-round scramble. Records rebuilt months later are the ones that fail diligence.
- Do I need cap table software before my first round?
- Not necessarily, but you do need a version derived from documents. Most teams move off spreadsheets when options and convertibles appear, because that is when the fully diluted number stops being obvious.
Put this into practice with Perseids.
Build your cap table on Perseids