Glossary · Equity and dilution · Updated 28 August 2026
A capitalisation table, or cap table, records who owns what in a startup: every shareholder, their share count, their percentage and the class of shares held. It is the first document an investor asks for, and the most revealing about how the company has been run.
A cap table is always read two ways. The basic version counts only issued shares. The fully diluted version adds everything that could become shares: granted options, the undistributed pool, outstanding convertibles. The second version is the one that matters, because it describes your real ownership.
Investors look for signals more than numbers. A departed founder still holding 25% while contributing nothing, twenty small shareholders with no common representative, an empty option pool: each makes the next round harder, and sometimes impossible without restructuring first.
The cap table must stay consistent with the statutory share register, which is the legally binding record. A spreadsheet that has drifted from the official register is a classic diligence problem, and fixing it takes weeks because the history has to be reconstructed transaction by transaction.
Example: a cap table after a seed round
A startup that raised €1M at a €4M pre-money, with a 10% option pool created before the round.
| Founder A | 400,000 shares — 40% |
|---|---|
| Founder B | 300,000 shares — 30% |
| Option pool (60,000 granted) | 100,000 shares — 10% |
| Angels (pre-seed) | 50,000 shares — 5% |
| Seed fund | 150,000 shares — 15% |
| Total fully diluted | 1,000,000 shares — 100% |
| Round price per share | €5.00 |
| Post-money valuation | €5,000,000 |
Founders keep 70% between them. Without the 10% pool they would have kept 78%: that is the cost, usually invisible in the conversation, of a pool created pre-money.
The common mistake
Keeping the cap table in a shared spreadsheet updated from memory after each transaction. By the third round nobody can reconstruct the history, and diligence turns a three-day task into a three-week project.
Frequently asked questions
What is the difference between a basic and a fully diluted cap table?+
The basic version counts only shares actually issued. Fully diluted adds everything convertible into shares: granted and ungranted options, convertible instruments, warrants. Negotiations are always run off the fully diluted version.
When does an investor ask for the cap table?+
Early, often at the second meeting and well before a term sheet. It shows at a glance whether the company is fundable: an unbalanced split or a dormant majority founder can end a conversation before it properly starts.
Related terms
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