Cap Table

Cap Tables in Plain English

A cap table is the master record of who owns how much of a company. It lists:

• Every class of stock (common, preferred, options, warrants, convertibles)
• Who holds each type
• How many shares they hold
• What they paid (or the price implied by their grant)

When you’re evaluating a startup offer, the cap table (especially the fully diluted version) is what tells you what your equity is actually worth as a percentage of the company.

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Fully Diluted vs. Outstanding

• Outstanding shares: What’s currently issued and held by people today.
• Fully diluted shares: Outstanding shares plus everything that could turn into shares:
  • Option pool (granted + ungranted options)
  • Warrants
  • Convertible notes / SAFEs (modeled as if they converted)

Your real ownership is:

Your shares ÷ Fully diluted shares

If you only look at outstanding shares, your percentage will look higher than it really is once all the promises (options, notes, etc.) are honored.

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Simple Early-Stage Pattern

At very early stages, a typical cap table might look like:

• Founders: 80–90%
• Option pool: 10–15%
• Investors: the rest (if any)

As the company raises more rounds (Seed, Series A, B, etc.), things get more complex:

• Multiple preferred share classes (Seed Preferred, Series A, Series B…)
• Warrants
• Convertible notes / SAFEs
• Side letters with special rights

All of these must be included in the fully diluted cap table.

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