How to Create a Cap Table

To help you manage all the details of your company shares and ownership, it is important to keep a cap table that has all the necessary details.

These days company founders are finding it more important to have a cap table to help them keep track of the shares in their company. While a cap table is simple in the beginning, as the company grows and employee stock options and funding rounds come into the picture, the cap table can quickly become complicated. To help you manage all the details of your company shares and ownership, it is important to keep a cap table that has all the necessary details.

Let us get into the topic more and understand what a cap table is, what is cap table management, and how to create a cap table.

Cap Table or Capitalization Table

A cap table is a spreadsheet where all the securities of the company are listed including the common shares, preferred shares, options, warrants, convertible notes, and so on. It also shows who owns them and the capital paid for owning these securities. The cap table basically shows each shareholder’s percentage of ownership in the company, the value of their securities, and the dilution over time.

In fact when a company starts off, the cap table of the ownership is the first thing recorded in the company’s articles of incorporation. This cap table is also a roadmap to help the company founders plan how to arrange the future share issuances and the next steps to grow the company with future funding. And as it grows and funding rounds take place, the cap table becomes complex. This is when a well organized ownership list is crucial when the company goes through potential sources of funding, initial public offerings, mergers and acquisitions, and other transactions.

How are Cap Tables used?

To help you understand a cap table more, let us talk about how they are used. Simply, cap tables help you understand your equity. You can easily understand your equity structure and make decisions based on it, such as if you want another funding round and how much equity you are ready to give up.

The cap table also helps you in the initial equity distributions among founders. Let us say there are three founders in a new startup. At the beginning they would discuss how to separate the founder shares, but will eventually need to get this on paper. Putting a cap table in place helps you with this and makes the discussions easier.

Additionally, it also helps you in managing employee options. There will come a time where you will want to give equity to your employees to reward them for their hard work. For this, equity incentives are best, as they will have a more vested interest in the growth of the company over time. The cap table will help you see how many options are available and how it would affect the other shareholders in the company.

The cap table would also help you in negotiating with investors about funding your company. If you know how many shares you can afford to give out without diluting your ownership, then your decision would be perfect. Both the investor gets what they want and you get it too. But you need a cap table for it to make such decisions.

Basically, a cap table is a snapshot of ownership information that helps you make decisions that are right for you and the financial condition of the company. Understanding all the information that it contains and the ways to use it would help you pave a great path to success for your business. You will be able to make the next big fundraising decision for your company. In short, the cap table is important.

Cap Table Management

With everything clear on what a cap table is, the next step is to manage it well. Cap table management is accurately and effectively managing all the complexities that come along the way. This includes drafting and signing legal documents, complying with regulations, communicating with shareholders, recording transactions, and many more.

Initially your cap table will be simple and straightforward, but keep it in mind that as the company grows, you will encounter more complex share ownership. Any company that has some worth or whose worth keeps increasing would normally have a complex cap structure.

New funding rounds or employee equity rounds can have you always looking back at your cap table. You will need to keep updating these things so that your upcoming decisions can be right. You will also have to update it when you sell new shares of existing securities, issue new shares, increase the option pool, or grant options to an employee.

Likewise, terminating options when an employee leaves the business, letting options expire, having an investor exercise vested options, or having an investor redeem, transfer, or sell shares are also instances that alter the cap table. Taking care of updating all the minute details and ensuring that all the data is right is called cap table management. Without cap table management, you may end up making wrong decisions as the updated information would not be in front of you.

It is important to have an updated and organized cap table so you:

  • Can easily tell shareholders how much they own
  • Know the number of shares remaining in your option pool
  • Know who needs to sign off on major company decisions
  • Know how to price future fundraising rounds
  • Can get reasonable and accurate 409A valuations
  • Can forecast potential payouts and dilution and share with investors

It helps you a lot in many ways, which is why cap table management is as important as having a cap table for your company. So, while you work on having and creating a cap table for your company, ensure that you manage and update it properly and on time. Or else it may be of no use to you as your decisions would be based on wrong or outdated facts. Hence, it is important to pay attention to your cap table management.

How do I Make a Cap Table?

As mentioned above, a cap table is a list of all the securities that your company has issued and who owns them. And even though it sounds simple, things get complicated easily. But how do you go about creating a cap table? Well, here are some of the ways through which you can make a cap table.

Note: There is no standard format to a cap table, which is also why there are multiple ways to build it. You should select the one that helps you the most for your company.

#1 Build Cap Table from Scratch

If you are a fan of using Excel sheets and like getting your hands dirty, then it is possible to build a cap table from scratch on Excel. You will have the most control over the details and this is the cheapest way to make a cap table in the beginning. However, it is not going to be a great long-term solution and you may have to do it all from scratch again when you move to cap table software. It is always a better idea to start off with using the right means to create your cap table application.

Name Common SharesPreference SharesStock Options Ownership Percentage
Tom Jones50,00020,00010,00031.37%
Bill Smith 70,00020,00015,00041.18%
Marie Brown 30,00020,00020,00027.45%
Total 150,00060,00045,000100%

Here are the pros and cons to creating a cap table from scratch on Excel:

  • Pros: You will be able to build it according to your specifications from the start. Cap tables usually look different from one another based on the kind of information you are trying to track and the questions you are trying to answer. By creating your own cap table, you can make sure that it has the information that you want and it is tailored for your company specifically.
  • Cons: It is hard to build, collaborate on, and maintain a cap table in Excel. Initially, the cap table in Excel might be a good option. But as your company grows, things become complicated. You will be raising funds and it would get harder to ensure that the cap table is accurate and that you have a single source of truth. And people in your team would obviously have different versions of the cap table. With this, errors would begin to creep in with every fundraiser or option grant. You also may find it hard to keep track of all the nuances manually.
How to get started with this option? - If you still want to move ahead with this option, then you just need to open a spreadsheet and start filling it out. Keep in mind that the goal is to show who owns what in the company. You might need some cap table examples to move on, or you can avoid all the trouble and move ahead to get a cap table template to help you.

#2 Use Cap Table Template

In case you are just starting out, it might make sense to start by using a cap table template instead of trying to mess things up on your own on Excel. With a cap table template, you would not have to create the cap table from scratch. Additionally, you would not have to pay for software to do this.

Here is how the cap table template usually looks like:

Cap Table Template

Here are the pros and cons of using cap table templates:

  • Pros: It is a quick way to start, as all you need to do is fill in the details according to the pre-filled cells. A cap table template gives you a good starting point and you can save some time initially, which you would have used otherwise to create it. It is an easy way to make sure that you include all the basic fields. In fact, having a simple cap table in a spreadsheet from the very beginning will ensure that you transition to cap table software easily and faster.
  • Cons: It is hard to keep updated and may not be robust enough for all your needs. While cap table templates can work for startups, they don’t scale well. This means that if the company grows, the template would turn out to be useless and the company would have to resort to other options.

If you end up raising multiple rounds of funding, are issuing options frequently, want to track more than the basics, or want to do scenario modeling, you will grow out of the spreadsheet cap table fast.

Additionally, while cap table templates have a basic format that is correct, it is easy to make errors. This is especially true when you are issuing securities and having multiple people make updates. Spreadsheets cannot check your data in real-time, and if several people have a copy of it and make their own updates without notifying others, it would be impossible to keep each copy updated. That is why cap table software is the best option.

How to get started with this option? - All you have to do is download a cap table template available online. Again, even though it is a good option to start with, it would not scale as your company grows. That is why it is always a good idea to use cap table software instead.

#3 Use Cap Table Management Software

Even though it might seem easy to track who owns what when you are a small company, it is essential to use the cap table software as soon as you start raising money. The software can scale with you and would help you stay updated as you get your new 409A valuations, issue options, offer liquidity, and more. And even though you might have to pay a bit to use it, you would be saving a lot of time and even money that you might have to spend later on legal issues in case you moved with a spreadsheet that caused you to make wrong decisions.

Cap table software

Here are the pros and cons of using a cap table software:

  • Pros: This is one of the easiest ways to keep all your data updated in the cap table. As a lot of transactions like issuing stock and fundraising can affect the cap table, it is important to have a single source of truth. All the details will be in real time, and your managers and company shareholders won’t have many of their own different cap table versions. This software may also save you time when handling other important share issues, such as corporate compliance, taxes, and 409a valuations.
  • Cons: The only con about this is that it costs money. While it does save you from other penalties that you might have to pay to the IRS if you do not comply with the rules or spend on legal matters if you make a wrong decision, you would have to pay to use the application. With Eqvista, our software is actually FREE to use for small companies with less than 20 shareholders. So, initially, you would not have to spend anything at all.

How to get started with this option? - With Eqvista cap table software, all you have to do is create an account and begin the process of creating your cap table. You will get help at every step and our easy to use interface allows companies to create their cap table in minutes, not hours.

Using Eqvista for Creating Your Company Cap Table

Eqvista is a sophisticated equity management and cap table software that helps track and manage the shares in the company. It helps founders make smarter decisions about their company’s equity. From seed-stage to pre-IPO companies, Eqvista enables companies to manage their shares electronically in the most advanced way.

Company ownership overview

Advantages of using Eqvista – Cap Table Management Software

There was a time where you had to spend a lot of money and time on accountants and lawyers who would keep track of all your shares in your company through a spreadsheet. Well, those days are gone. Eqvista was created to ease the burden for busy founders to efficiently manage their cap table and shares of their company

Here are the key features that make Eqvista worth a try:

Eqvista is constantly developing to make it better for our users. We try our best to stay ahead of every technological advancement that comes our way and to make the process seamless.

How to Easily Create a Company Cap Table using Eqvista

Creating a cap table on Eqvista is quite easy. All you have to do is sign up on the platform from our website, and create a company profile through the onboarding process with your company details. 

Once you are done with this, you will reach the main dashboard that will show you all about your company that you just created. Now, you can begin issuing shares and taking advantage of the Eqvista cap table platform.

Eqvista cap table platform

Check out the support articles here on how to use the application for each step! You can also educate yourself with any legal terms or things that you want to know more about here through the knowledge center.


All in all, a cap table is becoming more important in today’s world for businesses to stay up to date with their company equity. And as many companies are making the jump from Excel to online software, Eqvista is the best cap table software on the market to use. Our advanced cap table system coupled with an easy and straightforward user interface allows companies to easily handle their cap table needs. Try it out for yourself today!

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If you want to start issuing and managing shares, Try out our Eqvista App, it is free and all online!