Capitalization Table

What is a '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.'

BREAKING DOWN '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. Mortality Table

    A table that shows the rate of deaths occurring in a defined ...
  2. American Experience Table

    A set of data, presented in table format, showing when Americans ...
  3. Ultimate Mortality Table

    A mortality table that lists the death rates of insured persons ...
  4. League Table

    A ranking of companies based on a set of criteria such as revenue, ...
  5. Equity Participation

    Ownership of shares in a company or property. Equity participation ...
  6. Alphabet Rounds

    The early rounds of funding for a startup company, which get ...
Related Articles
  1. Investing

    A Look into the Exciting World of Venture Capital

    We look into the world of venture capital, where deep-pocketed investors gamble on funding the next big startup (or the next big flop).
  2. Economics

    Understanding Capital Investment

    Capital investment is a term that describes a company’s expenditures for long-term assets used in the operation of its business.
  3. Investing Basics

    Why Do Companies Care About Their Stock Prices?

    Read on to learn more about the nature of stocks and the true meaning of ownership.
  4. Entrepreneurship

    How To Raise Seed Capital and Grow Your Startup

    To get a business off the ground, entrepreneurs need a clear understanding of how to strategically position themselves for VC firms and angel investors.
  5. Term

    How Equity Capital Markets Work

    An equity capital market is a market existing between companies and financial institutions that raises money for the companies.
  6. Professionals

    Why Equity Financing Is Worth It

    When a business takes on an equity partner, it is exposed to a number of advantages that debt financing simply cannot provide.
  7. Investing

    What's a Break-Even Analysis?

    Most businesses have fixed costs such as rent and salaries, as well as costs for raw materials. Break-even analysis shows how many sales it takes to pay off the costs of doing business, and “break ...
  8. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  9. Stock Analysis

    Be Your Own Venture Capitalist With These Stocks

    By doing some digging, there are ways for the average joe to become his/her own venture capital fund.
  10. Mutual Funds & ETFs

    Private Equity A Trendsetter For Stocks

    In this article, we'll show you how private equity sets the trend for stocks everywhere.
RELATED FAQS
  1. What types of capital are not considered share capital?

    Find out what types of capital are not considered share capital, including an explanation of the different types of share ... Read Answer >>
  2. What are the different equity financing options available to companies in the United ...

    Learn what equity financing options are available to small, mid-sized and large companies within the United States and understand ... Read Answer >>
  3. What role do shareholders play in a capital budget?

    Learn about why shareholders play an integral role in capital budgeting and how it benefits businesses to use equity capital ... Read Answer >>
  4. What is the best form of equity financing for a start-up company?

    Learn the equity financing options available to small business, and understand the best equity options for companies during ... Read Answer >>
  5. What are the types of share capital?

    Understand the characteristics of common stock and preferred stock, the two ways by which companies obtain share capital ... Read Answer >>
  6. What is the difference between financial capital and economic capital?

    Read about the differences between types of financial capital, which companies use to raise money, and economic capital models ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center