A capitalisation table (cap table) is the authoritative ownership ledger of a startup. It lists every shareholder — founders, employees with options, angels, VCs, and holders of convertible instruments — along with their share count, share class, and ownership percentage on a fully diluted basis. It is a living document that changes with every funding round, option grant, and secondary transaction.
Cap table complexity grows with each financing event. Founders begin with common shares; the first external round introduces preferred shares with liquidation preferences; employee option pools add another share class; convertible notes and SAFEs add contingent equity that will later convert. A messy or inaccurate cap table is one of the most common causes of friction during due diligence — investors will scrutinise it carefully and expect it to reconcile perfectly with the legal documentation.
The most important concept embedded in a cap table is dilution: each new round of financing reduces existing shareholders' percentage ownership. Understanding your fully diluted ownership at each stage, and what it implies for your exit economics, is essential before signing any term sheet. For investors evaluating a deal, the cap table reveals the historical cost basis, the liquidation waterfall, and any concerning economic dynamics (such as a founder with de minimis remaining ownership after heavy dilution).