Cap table

Also called Capitalisation table

A list of who owns what. Simple to keep and painful to reconstruct.

What it means

A capitalisation table records every shareholder, how many shares of which class they hold, what percentage that represents, and any instruments that could convert into shares later — options, warrants, convertible loan notes.

A "fully diluted" cap table assumes everything that could convert has converted, which is the version investors work from.

Why it matters

It is the first document any investor asks for and the one most likely to reveal a problem: an early adviser with 5% and no paperwork, a share transfer never filed, options promised in an email and never granted.

Fixing those under the time pressure of a live round is expensive and sometimes impossible.

What it looks like in practice

Keep it in a spreadsheet from day one and update it the same day anything changes. Reconcile it against the Companies House register and your statutory books annually.

Model the effect of a round before agreeing it: pre-money, investment, option pool, post-money, and everyone's resulting percentage.

What to watch out for

Promises made verbally. "We said he'd get some equity" is a cap table entry with no number, and it will surface at the worst moment.

Convertible instruments left out of the fully diluted view, which makes the founders' percentage look better than it is.

Where to get proper advice

A corporate solicitor to reconcile the legal position once. After that it is your spreadsheet and your discipline.