Capitalization Table

AAA

DEFINITION of 'Capitalization Table'

A spreadsheet or table that shows ownership stakes in a company, typically a startup or early stage venture. A capitalization table is a record of all the major shareholders of a company, along with their pro-rata ownership of all the securities issued by the company (equity shares, preferred shares and options), and the various prices paid by these stakeholders for these securities. The table uses these details to show ownership stakes on a fully diluted basis, thereby enabling the company's overall capital structure to be ascertained at a glance.


Also known as 'cap table.'

INVESTOPEDIA EXPLAINS 'Capitalization Table'

A common template for capitalization tables is to list shareholders in a column on the left side of the table and describe each investment round (such as Series A, Series B etc.) across the top of the table. Founders are usually listed first, followed by executives and key employees with equity stakes, and then investors such as angel investors and venture capital firms for each round.

While the capitalization table may seem like a basic document, it is an essential component in the growth and evolution of a successful company. Access to sufficient capital is vital for the early success of a development-stage company, and the capitalization table is an invaluable tool for recording and tracking ownership stakes as the company advances its business plan.

RELATED TERMS
  1. Shareholder

    Any person, company or other institution that owns at least one ...
  2. "A" Round Financing

    The first major round of business financing by private equity ...
  3. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  4. Capital Structure

    A mix of a company's long-term debt, specific short-term debt, ...
  5. Angel Investor

    An investor who provides financial backing for small startups ...
  6. Startup

    A company that is in the first stage of its operations. These ...
RELATED FAQS
  1. How does additional equity financing affect existing shareholders?

    Additional equity financing dilutes existing shareholders. There are two types of candidates for equity financing. One is ... Read Full Answer >>
  2. How do the C-suite members work together to make a successful company?

    Corporate managers, typically chosen by a board of directors in large organizations, are ultimately responsible to stakeholders ... Read Full Answer >>
  3. What rights do all common shareholders have?

    Individuals that own common shares of company stock are viewed as the true owners of that company. As such, a common shareholder ... Read Full Answer >>
  4. Why is a shareholder rights plan called a "poison pill?"

    To avoid being the target of a hostile takeover by a larger firm, a corporate board might adopt a defensive strategy called ... Read Full Answer >>
  5. How can investors influence the c-suite?

    Investors in publicly traded firms can influence C-suite executives by exercising voting rights or engaging in investor activism. ... Read Full Answer >>
  6. What is the difference between a summary prospectus and an offering memorandum?

    All securities offered to investors in the United States are required to comply with the anti-fraud provisions of federal ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    How Venture Capitalists Make Investment Choices

    In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists.
  2. Investing Basics

    What Is Private Equity?

    This investment vehicle attracts wealthy investors to increase the value of portfolio companies.
  3. Fundamental Analysis

    Cashing In On The Venture Capital Cycle

    Find out how VC firms make the market go round, and round and round.
  4. Investing Basics

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  5. Options & Futures

    When Your Business Needs Money: Angel Investors

    If you have a promising business that needs a boost, you may be able to put your faith in these wealthy investors.
  6. Entrepreneurship

    Top 9 Venture Capital Interview Questions

    Ace your interview by learning how to break down the most common questions asked.
  7. Investing Basics

    What are Ordinary Shares?

    Ordinary shares are any type of shares that are not preferred and don’t pay any type of predetermined dividend amount.
  8. Investing News

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  9. Brokers

    Private Equity's Returns Are Tempered By Its Risks

    Private equity firms adopt approaches to quickly hike up earnings and boost returns, but these investments come with big risks too.
  10. Entrepreneurship

    The Risk And Rewards Of Investing In Startups

    Investing in startups is a very risky business but can reward investors greatly if and when they do pay off.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center