Cap Table

A capitalization table (cap table) is a complete record of every equity owner in a company — founders, investors, employees with ESOPs, and any convertible instruments yet to convert. It shows ownership percentages, share classes, and the dollar or rupee value of each stake at any given valuation.

A clean cap table matters because it determines: how much each person gets in an exit, how much founders dilute with each new round, whether the company can raise future rounds without governance complications, and how ESOP pools affect everyone's ownership.

Cap tables become complex quickly. Series A companies often have: founders (2–4 people), angels (5–15 people), an ESOP pool (10–15%), and institutional investors — all with different share classes and rights.

Indian cap tables are complicated by the use of CCPS (Compulsorily Convertible Preference Shares) — investors hold preference shares that convert to equity at IPO or acquisition. This means the cap table shows both preference shares and common equity, and different liquidation waterfalls apply depending on the exit route.

Indian founders should model their cap table through Series A and Series B before accepting pre-seed or seed money — the compounding effect of early dilution, ESOP pool creation, and preference share terms can leave founders with surprisingly little ownership by Series B.