Building Your Cap Table the Right Way

Your cap table is the master record of who owns what. A messy, inaccurate, or overly generous cap table can kill deals and undermine trust with investors. Keep it clean, updated, and aligned with long-term hiring and funding plans.

Why it Matters

A cap table isn’t just a spreadsheet — it’s your company’s DNA.

Every equity decision — from founders to hires to investors — ends up here. It’s the first thing investors ask for. It shows how committed your team is and whether your equity strategy is sustainable.

Founders Checklist

Track founders, employees, advisors, and SAFEs/options clearly
Include: name, number of shares, % ownership, and vesting status
Use cap table software (e.g., Carta, Pulley, LTSE Equity)
Keep it updated after every change — no verbal agreements
Forecast future dilution and hiring needs using scenario modeling

Founder Fails

Forgetting to track SAFEs or convertible notes
Failing to adjust for option pools post-funding
Not updating the table after new hires or grants
Issuing equity before board or legal approval
Showing percentages instead of total shares and ownership clearly

When to ask for Help

You’re building your first cap table and want to avoid errors
You’re preparing for a funding round and need a clean version
You’re unsure how to model dilution from future hires or SAFEs
You need help interpreting investor-preferred equity terms
You want to forecast how much equity to reserve for hiring

Frequently Asked Questions

Q: Can we just use a spreadsheet?
A: At the earliest stage, yes. But once you hire or raise funds, use proper software — it prevents errors and builds trust.

Q: Should we include unvested equity on the cap table?
A: Yes — but clearly mark what is vested vs. unvested.

Q: What about option pools?
A: Your option pool (typically 10–20%) should be shown on a fully diluted basis — including what’s granted and what’s reserved.