Simple Cap Table Template - Excel
Keep track of the ownership percentage for your company for the founders and investor, the values of their securities, and dilution over time.Download Template
- Increase investor confidence by providing a picture of current shareholders and the equity that each one possesses to forecast potential payouts and dilution.
- Evaluate how much control and leverage could be maintained during negotiations for potential investors.
- Keep the real-time value of employees with options or equity stakes.
What is a Capitalization Table?
A capitalization table, or cap table, is a financial document that details the ownership structure of a company. This includes the percentage of ownership held by each shareholder, as well as the number of shares owned by each. The capitalization table can be used to determine voting rights, dividend rights, and other important information about a company's shareholders.
What Goes in a Capitalization Table?
A capitalization table can be divided into three sections: common stock, preferred stock, and debt. Within each section, there will be a list of shareholders and their corresponding ownership percentages. For example, if you are looking at the common stock section of a cap table, you will see a list of all the shareholders who own common stock in the company. Each shareholder will be listed with their percentage of ownership next to their name.
What is Common Stock?
Common stock is the most basic type of stock and gives the holder voting rights and the potential to earn dividends. However, holders of common stock do not have any guaranteed rights to the company's assets in the event of liquidation or bankruptcy.
What is Preferred Stock?
Preferred stock is a type of stock that gives the holder preference over common stockholders in the event of a liquidation or bankruptcy. Preferred shareholders also have the potential to earn dividends, but these are typically fixed and do not fluctuate like those of common stock.
What is Debt?
Debt is money borrowed by a company and must be repaid with interest. Debt does not give the holder any ownership stake in the company, but it can be converted into equity if certain conditions are met. For example, some bonds can be converted into shares of common stock at the bondholder's discretion.
Why is a Capitalization Table Important?
A capitalization table is an essential tool for shareholders and a company's management. For shareholders, the cap table can be used to determine their rights and privileges within the company. For example, a shareholder with a large percentage of ownership may have more voting power than one with a smaller stake.
For management, the capitalization table can be used to help raise capital for the company. For example, if a company is looking to issue new shares of stock, management can use the cap table to determine how many shares each shareholder will own after the issuance. This can help prevent the dilution of existing shareholders' stakes in the company.
Investors can also use the capitalization table to assess a company's financial health. By looking at the percentage of ownership held by each shareholder, investors can get an idea of how much control the company's management has over its operations. Additionally, the debt-to-equity ratio can be used to assess a company's financial leverage and ability to repay its debts.
What is a Capitalization Table Used For?
A capitalization table can be used for a variety of purposes, including:
- Assessing a company's financial health
- Determining voting rights and privileges for shareholders
- Managing shareholder dilution
- Planning for an initial public offering (IPO)
- Raising capital for a company
What are the Different Types of Cap Tables?
There are two main types of capitalization tables: fully diluted and as-is.
Fully Diluted Capitalization Table
A fully diluted capitalization table shows what the ownership structure of a company would look like if all outstanding securities were converted into shares of common stock. This includes options, warrants, and convertible debt. Fully diluted cap tables are typically used when a company is raising capital or preparing for an initial public offering (IPO).
As-Is Capitalization Table
An as-is capitalization table only includes shares of common stock that have already been issued. It does not include any securities that have not yet been converted into shares of common stock. As-is cap tables are typically used for internal purposes, such as tracking shareholder dilution.
How to Read a Capitalization Table?
A capitalization table can be challenging to read if you do not know what all the terms mean. Below is a brief explanation of some of the most important terms you will see on a cap table.
- Authorized Shares: The total number of shares of stock that a company is authorized to issue. This number is set by the board of directors and can be increased or decreased as needed.
- Issued and Outstanding Shares: The number of shares of stock issued by the company and are currently held by shareholders.
- % Owned: The percentage of the company's shares owned by a particular shareholder.
- Diluted % Owned: The percentage of the company's shares that a particular shareholder would own if all outstanding securities were converted into shares of common stock. This includes options, warrants, and convertible debt.
- Pre-Money Valuation: The value of a company before a new investment is made.
- Post-Money Valuation: The value of a company after a new investment has been made.
How to Calculate a Company's Post-Money Valuation?
To calculate a company's post-money valuation, you will need to know the pre-money valuation and the amount of new investment.
Company Post-Money Valuation Formula
The formula for calculating the post-money valuation is:
Post-Money Valuation = Pre-Money Valuation + New Investment
For example, let's say a company has a pre-money valuation of $10 million and receives $2 million in new investment. The company's post-money valuation would be $12 million. ($10 million + $2 million = $12 million)
What is a Company's Equity Split?
A company's equity split is the percentage of ownership that each shareholder has in the company. This can be determined by looking at the capitalization table.
For example, let's say a company has 100 shares of common stock outstanding and two shareholders. Shareholder A owns 60 shares, and shareholder B owns 40 shares. Shareholder A has a 60% ownership stake in the company, while shareholder B has a 40% ownership stake.
What is a Company's Debt-to-Equity Ratio?
The debt-to-equity ratio is a financial metric used to assess a company's leverage and ability to repay its debts. This ratio is calculated by dividing a company's total liabilities by its total equity.
A higher debt-to-equity ratio indicates that a company is more leveraged and may have difficulty repaying its debts. A lower debt-to-equity ratio indicates that a company is less leveraged and may have an easier time repaying its debts.
What Is a Cap Table Example?
Below is a capitalization table for a fictitious company called ABC, Inc.
- Authorized Shares: 10,000,000
- Issued and Outstanding Shares: 5,000,000
- % Owned: 50%
- Diluted % Owned: 60%
- Pre-Money Valuation: $10,000,000
- Post-Money Valuation: $12,000,000
As you can see from this example, ABC, Inc. has 10,000,000 authorized shares of stock and 5,000,000 shares of stock that have been issued and are currently outstanding. The company has a pre-money valuation of $10 million and a post-money valuation of $12 million.
The shareholders own 50% of the company on a fully diluted basis. This means that if all outstanding securities were converted into shares of common stock, the shareholders would own 60% of the company.
What is a Capitalization Table Template?
A capitalization table template is a tool that can be used to create a capitalization table. This template can be used to track the ownership stake of each shareholder, the number of shares of stock that have been issued, and the value of the company.
Why Use a Cap Table Template?
There are many reasons why you would want to use a capitalization table template.
- First, a capitalization table can be used to track the ownership stake of each shareholder. This information is vital for both the shareholders and the company itself.
- Second, a capitalization table can be used to track the number of shares of stock that have been issued. This information is essential for both the shareholders and the company itself.
- Third, a capitalization table can be used to track the value of the company. This information is important for both the shareholders and the company itself.
A capitalization table template is an efficient way to create and maintain a capitalization table. Using a template, you can ensure that the information in your capitalization table is accurate and up-to-date.
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