Cap table

A cap table (capitalisation table) is the authoritative record of who owns what in a company. It tracks every share class (founders' equity, preference shares, ESOP pool, warrants, convertible instruments), the number of units of each, and each holder's percentage on both a basic (only issued shares) and fully diluted (all issued shares plus all instruments that could convert into shares) basis.

Why it matters: Every financing decision, option grant, and secondary sale changes the cap table. A founder who does not maintain an accurate, up-to-date cap table cannot properly negotiate valuations, model dilution across future rounds, or communicate to incoming investors. Errors discovered during due diligence — missing ESOP grants, untracked convertible notes, incorrect share classes — can delay or kill a deal.

What a complete cap table includes: Founder shares (by name), institutional investor stakes (by round), ESOP pool (both granted and ungranted), SAFE notes and convertible notes (shown as potential future equity), and any warrants. The fully diluted total is the most important number for valuation and ownership calculations.

Indian legal context: Under Indian company law, the company must maintain a register of members and file share allotments with the Registrar of Companies (ROC). The cap table must reconcile with these statutory records. Discrepancies are a red flag in due diligence and can trigger legal complications during acquisitions or IPOs. Founders are advised to maintain a live working cap table in addition to statutory filings from Day 1.