Cap Table Guide for Founders Preparing to Raise

A cap table is the working answer to a simple question: who owns what, through which instrument, and on what assumptions? For a founder preparing to raise, that answer needs to be accurate enough to inspect, simple enough to explain, and current enough to support the next conversation.

This cap table guide is for founders, business owners, and dealmakers who need a practical starting point. It explains what a basic capitalization table should contain, how to separate current ownership from a proposed round, and how to turn missing information into useful questions. It does not tell you what your company is worth or which financing terms to accept.

What a cap table tells a founder before a raise

A cap table, short for capitalization table, is an ownership summary. A simple version may show each holder and their shares. A more useful startup cap table also identifies the type of security, the relevant class, issued shares, reserved shares, and instruments that could change the ownership picture.

The U.S. Securities and Exchange Commission describes investor ownership as something that is often represented by a percentage or by shares or units on a cap table. The SEC also distinguishes common stock, preferred stock, options, restricted stock units, convertible notes, and SAFEs as different instruments with different consequences. That is why “the founders own 80%” is not enough context for an investor conversation. You need to explain what the percentage includes and what it leaves out.

A good cap table helps you answer five preparation questions:

• Which people, entities, or trusts hold an ownership interest?
• Which shares are issued now, and which shares are reserved or expected to be issued?
• Which share classes and rights need to be explained?
• Which awards, options, SAFEs, notes, warrants, or other instruments may affect the result?
• What would the ownership picture look like under the specific round you are discussing?

These are record and communication questions. They are not a substitute for company-register review or qualified legal, tax, accounting, and financial advice.

The parts of a basic cap table

There is no single layout that fits every company. The useful test is whether someone responsible for the records can trace each material number back to an agreement, approval, grant, issuance, or other source. Cooley’s cap-table glossary similarly describes a cap table as a summary or detailed record of who owns what and notes that a company should be able to prepare an organised, accurate table.

Part	What to show	Question to resolve
Holders	Founder, employee, adviser, investor, and entity names	Do the names match signed records and the company register?
Security and class	Common, preferred, options, restricted awards, or another instrument	Are class rights and voting or economic differences recorded?
Current position	Issued shares, ownership percentage, and any reserved pool	Does the denominator match the view being presented?
Potential dilution	Unallocated pool, convertibles, warrants, and other assumptions	What is included in a fully diluted view, and why?
Round scenario	New shares, price or valuation assumptions, and post-round ownership	Which inputs are agreed, illustrative, or still open?

Keep the current cap table and any scenario model visibly separate. Mixing a proposed investment into the current ownership view makes it harder to see what exists today and easier for an old assumption to look like a signed fact.

For the ongoing lifecycle, see cap table management before, during, and after a funding round.

Issued, fully diluted, and pro forma views

Many cap table disagreements are denominator disagreements. An issued-share view describes shares that have actually been issued. A fully diluted view may also include options, an unallocated option pool, warrants, or conversion assumptions, depending on the model and the question being asked. A pro forma view shows what ownership could look like after a defined transaction or set of assumptions.

Use a short label beside every percentage:

• Current issued view: the ownership recorded as of a stated date.
• Fully diluted view: the additional instruments or reserved shares included in the denominator.
• Pro forma round view: the scenario after the new shares and explicitly stated assumptions are applied.

Do not present a pro forma number as if it were a final term. If the price, pool treatment, conversion mechanics, or number of shares is still being discussed, label it as an illustration and list the open assumptions. The purpose of the model is to improve the question you ask next.

How to build a cap table without losing the source trail

1. Start with the ownership records

Collect the documents and approvals that create or change ownership. Depending on the company, this may include incorporation records, share issuances, transfers, board or shareholder approvals, option or equity-award records, and signed financing documents. Create a source column or linked folder reference for each material line. If two records disagree, do not silently choose the number that makes the percentages look better. Mark the difference for resolution.

2. Name every holder and instrument

Use consistent names and distinguish an individual from an entity. Record whether the line is common stock, preferred stock, an option, a restricted award, a SAFE, a convertible note, a warrant, or another instrument. A cap table explained only as “founders, team, and investors” hides questions that may matter later.

3. Separate granted awards from the unallocated pool

Employee equity is not one undifferentiated percentage. Separate grants that have been made from shares reserved but not yet granted. Track the date, recipient, number of units, vesting or exercise terms where relevant, and the approval or plan source. Cooley’s founder-equity guidance recommends modelling a pro forma cap table for future financing and considering founders, advisers, an option pool, and investors as distinct lines. Treat that as a prompt to keep your own records and assumptions explicit.

4. List conversion assumptions separately

SAFEs, notes, warrants, and other convertible instruments can change a future ownership view without appearing as current issued common shares. Capture the instrument, holder, principal or unit count where relevant, conversion trigger, discount or cap if applicable, maturity or expiry where applicable, and the source document. Do not invent a conversion result when the governing terms or round inputs are not settled.

5. Reconcile the totals

Check that the holder lines tie to the issued total, that each class total ties to the supporting records, and that the percentage denominator is stated. Then create a separate round scenario with a date, version, inputs, and owner. A spreadsheet is only as reliable as the records and assumptions behind it.

Model the round before you discuss terms

Once the current table is reconciled, create a clearly named scenario. Start with inputs that are easy to identify: the current share denominator, proposed investment, price or valuation assumption, any new shares, the treatment of an option pool, and the instruments that may convert. The model should show the result for founders, existing holders, new investors, and the pool under the same stated denominator.

To develop the valuation assumption behind your scenario, use our startup valuation guide to organize the market, traction, financial, ownership, and financing evidence before you model the resulting ownership.

Keep an assumptions panel next to the output. For each input, mark it as documented, proposed, illustrative, or unresolved. Add a date and version. If someone changes the investment amount or pool treatment, save a new scenario rather than overwriting the one used in an earlier conversation.

A model can make dilution visible without making a recommendation. It can also reveal that the most important question is not “what percentage will I have?” but “which inputs are being used to calculate that percentage?” That distinction helps founders ask better questions about the draft terms and helps advisers review the correct version.

Use the cap table to improve the investor conversation

An investor does not need a long spreadsheet tour in the first conversation. They do need a coherent ownership story. Prepare a short summary that points to the current date, the main holders, the classes, the fully diluted treatment, the proposed round assumptions, and the open questions.

Explain the table in this order:

1. Current position: who holds the recorded ownership today.
2. Important instruments: what awards or conversion instruments need context.
3. Scenario: what a defined round could show, with assumptions labelled.
4. Open questions: which points need document review or a professional decision.

This approach keeps the cap table connected to the wider relationship. A founder who can explain what is known, what is modelled, and what still needs review is easier to work with than a founder who presents a precise number without a source trail. Your founder ownership resource center can help with the broader ownership and dilution questions, while the founder financing resource center puts the ownership conversation beside the choice of financing route.

Common cap table problems that slow a raise

Old numbers presented as current

A table copied from the last financing can carry an outdated holder name, grant, transfer, or pool balance. Add an as-of date and owner to every working version. If the table has not been reconciled recently, say so before using it in a conversation.

Percentages without a denominator

“Twenty percent” can mean different things in an issued view, a fully diluted view, or a pro forma round view. Put the denominator and included instruments in the heading or notes. If you cannot explain the denominator in one sentence, pause the presentation and resolve it.

Unallocated pool treated as already granted

An option pool may contain granted and unallocated portions. Combining them can obscure both the current record and the effect of a proposed pool change. Keep those lines separate and have the relevant plan and financing documents reviewed by qualified advisers.

Convertible instruments omitted from the discussion

A SAFE or note may not look like current common stock, but it can matter to a future ownership scenario. The SEC’s overview of common startup securities is a useful high-level reference for why different instruments need different treatment. It does not replace review of the actual document.

False precision

Formatting a scenario to two decimal places does not make its inputs settled. Use rounded presentation where it improves readability, retain the calculation detail in the working file, and label estimates as estimates. Precision is useful when it makes assumptions easier to test, not when it disguises uncertainty.

A founder cap table checklist

• Every holder is named consistently and tied to a source record.
• Issued shares and classes reconcile to the company’s supporting records.
• Granted awards and the unallocated pool are separate lines.
• SAFEs, notes, warrants, and other conversion instruments are listed with their source documents.
• The denominator is labelled for current, fully diluted, and pro forma views.
• Every round scenario has a date, version, owner, and assumptions list.
• Open questions are written down instead of being hidden in a percentage.
• The summary is short enough to explain and detailed enough to audit.

When the table is ready for a wider preparation process, connect it to your capital-raising resource center notes, check the likely investor fit path, and organise the supporting material in your funding deal room resources. If your next step is a relationship-led introduction, review capital raising without cold pitching so the ownership explanation sits inside a useful conversation rather than a rushed pitch.

Sources and professional boundaries

This guide uses high-level educational material from the U.S. Securities and Exchange Commission overview of common startup securities, the Cooley GO cap-table glossary, Cooley’s guidance on allocating stock to founders and early team members, and its sample simple cap table. These sources support the definitions and preparation concepts above. They are not a review of your company’s documents or terms.

This article is educational and general in nature. It does not provide legal, tax, accounting, financial, securities, valuation, or investment advice. It does not guarantee introductions, investor interest, a term sheet, or funding. Have qualified professionals review your actual ownership records, equity plan, securities, and proposed financing documents.

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