The template
This interactive tool is in development.
What a cap table is
A cap table, short for capitalisation table, is the record of ownership in a company. The table lists every shareholder, how many shares each holds, and what percentage of the company those shares represent.
Early-stage cap tables get complicated by instruments which are not shares yet. Options granted to employees, SAFEs, and convertible notes all become shares later, under conditions set when they were issued. A cap table ignoring them describes ownership as it was, rather than ownership as it will be.
Fully diluted ownership is the number investors care about. Fully diluted means the percentage each holder owns once every option, SAFE and convertible has converted into shares. Founders often quote the undiluted figure, which is higher and misleading, and investors correct it in the first meeting.
What belongs in a cap table
| Column | What it holds | Common mistake |
|---|---|---|
| Holder | The name of the person or entity | Nominee and trustee structures recorded under the wrong name |
| Security type | Ordinary, preference, option, SAFE, convertible | Treating options as shares before grant |
| Shares or units | The count, rather than the percentage | Storing percentages, which stop reconciling after any change |
| Issue or grant date | When it was issued | Missing dates, which makes vesting unverifiable |
| Price per share | What was paid | Omitted for founder shares, making the price history incomplete |
| Fully diluted percent | Calculated, never typed | Typed values drifting away from the share counts |
Store share counts, and calculate percentages. Percentages typed by hand stop reconciling the moment anything changes, and a cap table failing to reconcile is the single most common diligence delay.
How to calculate fully diluted ownership
Fully diluted ownership is each holder's shares divided by the total of all shares, options and converting instruments. Four steps produce it.
- Count issued shares. Ordinary and preference shares already on the register.
- Add granted options. Both vested and unvested, because both will exist.
- Add the unallocated option pool. Investors include it, since the pool exists to be granted.
- Add converting instruments. SAFEs and convertible notes at their conversion price.
The unallocated pool is where founders and investors most often disagree. A founder computing ownership before the pool sees a higher number than the investor computing it after. Both are arithmetically correct. The investor's version is the one appearing in the term sheet.
Cap table mistakes costing founders money
- Percentages stored rather than calculated. The table stops reconciling, and nobody notices until diligence.
- SAFEs omitted. The cap table shows ownership pretending money was never raised. Investors treat the omission as concealment rather than oversight.
- The option pool ignored until the term sheet. A pool created pre-money dilutes founders alone. Recognising this late removes the chance to negotiate it.
- Companies House left unreconciled. Statutory filings and the internal spreadsheet drift apart, and investors check both.
- Verbal promises undocumented. An adviser promised 1% with no paperwork appears during diligence, at the worst moment.
Reconcile the cap table with Companies House every time shares are issued. The exercise takes twenty minutes and prevents the most common late-stage surprise.
Do I need cap table software
Most startups need cap table software once the register passes roughly twenty holders, or once options are granted regularly. Below that, a maintained spreadsheet is genuinely adequate.
| Approach | Cost | Suits | Trade-off |
|---|---|---|---|
| Spreadsheet or this template | £0 | Pre-seed and Seed | Manual reconciliation, no audit trail |
| SeedLegals, Ledgy, Vestd | £50 to £300/mo | Seed to Series A | Often bundled with instruments already used |
| Carta | £200 to £1,000+/mo | Series A and above | Overkill early, strong at scale |
Software prevents arithmetic errors rather than judgement errors. A platform will happily model a structure wrong for the company. Deciding the pool size, the vesting terms and the round structure sits outside the software.
Frequently asked questions
A cap table, short for capitalisation table, records who owns what percentage of a company. The table lists shareholders, share counts, and ownership percentages, alongside options, SAFEs and convertible notes which become shares later.
Fully diluted ownership is the percentage each holder owns once every option, SAFE and convertible note has converted into shares. Fully diluted is the figure investors use, and it is lower than the undiluted figure founders often quote.
Yes, including the unallocated portion. Investors calculate ownership with the full pool included, because the pool exists to be granted. Excluding it produces a founder ownership figure higher than the one appearing in the term sheet.
SAFEs appear as converting instruments rather than shares, modelled at their conversion price with the resulting share count added to the fully diluted total. Omitting SAFEs makes the cap table wrong, and investors treat the omission as concealment.
Cap table software becomes worthwhile once the register passes roughly twenty holders or once options are granted regularly. Below that, a maintained spreadsheet works. Software prevents arithmetic errors rather than judgement errors.
Update the cap table whenever shares or options are issued, and reconcile it against Companies House at the same time. Drift between the internal spreadsheet and statutory filings is a common cause of diligence delay.
Next step
Model what the next round does to ownership with the dilution calculator.
Founders raising up to £600,000 can work with Lucy Colson through Capital Studio, at £500 a month, with no equity and no success fees.