June 7, 2020  
  Articles for Entrepreneurs  

Capitalization Table


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Definition of Capitalization Table

A Capitalization Table, often called a "Cap Table", is a table that shows all the securities issued by a firm and who owns those securities.
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Cap tables typically are segmented based on the securities owned. In other words, the cap table separates common stock, preferred shares, options and warrants. It defines the ownership percentages for each security.

For entrepreneurs who raise venture capital, it is important to track your capitalization table closely and to do "what if" scenarios on future funding rounds. For example, if we raise $10 million in the next round with a pre-money of $50 million, what will the pro forma cap table look like?

Prior to acquiring your company, acquirers will frequently ask about your capitalization structure. In this case, they are asking who owns the company and how well capitalized you are.




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