Use this as a capitalisation table (cap table) template for your next round of investment. It includes a quick guide on cap tables and useful tips.
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Raising capital is an important step for startups as it allows them to scale their business and bring their product or service to market. One key aspect of fundraising is the effect it has on a company's capitalization table, also known as a cap table.
A cap table is a record of the equity ownership in a company and is used to track the distribution of shares and equity dilution.
If you’re creating a cap table for the first time, starting from scratch can feel overwhelming and get complicated even as an early stage startup.
Use this template to get to grips with the foundations of cap tables, or use it as a starting point to create your own cap table based on your inputs. The document will automatically update all references and accurately reflect your business.
It also includes a detailed guide on how cap tables work and some useful tips from Decipad's founders!
Duplicate our template and customise it to your business needs. You can try it out for free here
An Employee Stock Ownership Plan (ESOP) is a benefit plan that allows employees to acquire a stake in the company they work for. In this sample cap table, we added the ESOP before the investment because that is the most typical setting in venture funding.
When closing a venture round, a startup is essentially selling a percentage of their company in return for an investment amount. The percentage of the company being sold, known as the "equity stake", is determined by the valuation of the company.
Valuation is the process of determining the worth of a business. The two key terms to understand in this context are pre-money valuation and post-money valuation.
Therefore, the equity stake being sold is determined by the difference between the post-money and pre-money valuations.
In a fundraising round, startups typically raise capital from a mix of institutional investors and angel investors. Institutional investors are typically large investment firms or venture capital firms, while angel investors are high net worth individuals who invest their own money in startups.
A common difference between institutional investors and angel investors is that institutional investors typically receive preference shares, while angel investors do not.
The price per share is the value of one share of stock in a company. It is determined by dividing the total value of the company by the total number of shares outstanding (PPS). In this example, the price per share is ≈$2.27 per share. This means that each share of the company is worth ≈$2.27 per share.
Preference shares are a type of stock that gives the holder certain rights and privileges over common stockholders. These rights can include priority in receiving dividends or in the event of a liquidation, as well as the ability to convert their shares into common stock at a predetermined price.
It's important to note that preference shares are not a “must have” in every round, and it will depend on the company and the investors' preferences and negotiation. Also, preference shares can have different rights and privileges depending on the company, it's important to consult with a lawyer or an experienced advisor.
The allocation table shown below allows users to customize the equity structure of their company to their particular circumstances. They can input the percentage of the company that is sold to institutional investors and the percentage of the company that is sold to angel investors.
The cap table template will then automatically update and reflect the new ownership structure of the company.
