Equity & Ownership

Cap Tables

Understand the cap table, the master record of who owns what, where dilution and share classes accumulate and where you run the "waterfall" to see what everyone actually gets in a sale. Managing it deliberately is essential.

  • Intermediate
  • 13 min total
  • 13 chapters

What decision this helps you make: How to read and manage the cap table: the single source of truth for ownership, and where the true economics of every stake are revealed.

What this topic is

A cap table (capitalization table) is the master record of who owns what: every shareholder, their shares/options and class, and the resulting ownership percentages. It's the definitive map of a company's ownership.

Why it matters

It's where ownership decisions become concrete: every round and grant changes it (dilution, new holders), and it's where liquidation preferences and classes live, so it's the tool for running the "waterfall" to see what each holder would actually receive in a sale.

Who should learn it

Founders and anyone who needs to understand a company's ownership and payouts.

What you will understand

  • Understand the cap table as the master record of ownership
  • See how every round and grant changes it
  • Know it's where preferences and classes reveal real payouts
  • See why managing it deliberately is essential

Prerequisites

Common misconception

"The cap table is just a boring spreadsheet, and ownership is really about the headline percentages." The cap table is the single source of truth for ownership, and it's where the real economics live: not just percentages, but share classes, preferred preferences, and the "waterfall" that determines what each holder actually receives in a sale. A messy cap table (too many small holders, a big preference stack, bad accumulated terms) can complicate financing, cut payouts, and derail deals. Managing it deliberately is essential.