How do you manage a cap table?

Here are six best practices that help founders improve and maintain an effective cap table management process.

1. Familiarize yourself with its basic elements and formats.
2. Recognize the importance of executive alignment.
3. Evaluate and implement tools to help you manage it.
4. Determine and delegate ownership of the cap table.

What is a cap table Carta?

A capitalization table (or “cap table”) is a list of all the securities your company has issued and who owns them. Securities include stock, convertible notes, warrants, and equity grants.

How do you clean a cap table?

The concept behind cleaning the cap table is simple: we just need to restructure it so that most of the equity is held by full-time active management team members, financial investors at a market price, and an ESOP or ESOS. This restructuring is also relatively simple.

How do you make a cap table?

How to Make a Cap Table

1. Authorized shares: Number of shares the company is allowed to issue.
2. Outstanding shares: Number of shares held by all shareholders in the company.
3. Unissued Shares: Number of shares that have not been issued.
4. Shares reserved for stock option plan: Unissued shares reserved for future hires.

What should I look for in a cap table?

4 Things Investors Secretly Look For in Your Cap Table

1. Breaks. Cap tables containing so many investors that the table requires page breaks are a red flag for most investors.
2. Loners. The Cap Table shows how much capital investors contributed and who owns which percentages.
3. Impossibles.
4. Favorites.

How do I view the cap table in Carta?

Investors on Carta can request access to company cap tables when they accept securities….Request Cap Table Access – Investment Fund

1. From the left side panel, navigate to Cap table access.
2. Check off the company that you would like to request cap table access.
3. Click Actions > Request cap table access.

How do I make a cap table?

What is a cap table and what is it used for?

A capitalization table is a table showing the equity ownership capitalization for a company. The capitalization table is essential for financial decisions involving equity ownership, market capitalization, and market value. Capitalization tables help private companies maintain the calculation of their market value.

What is a cap table venture?

A VC Cap Table (capitalization table) is created by venture capital partners and their legal teams to provide a summary of the investor and employee ownership in a startup or venture-backed business.

What does clean cap table mean?

A clean cap table means that it is up-to-date for the latest transactions, accurately reflects company ownership, and shows options available to employees or capital providers. All this information needs to be quickly assessed to understand shares authorized, issued, and outstanding.

What is a messy cap table?

A messy cap table is generally everything except the above. But, there are some common errors that we see in the market: AD. Remove this ad space by subscribing.

Why choose Carta capitalization tables?

With Carta, your cap table updates automatically when you issue electronic securities, raise a round, or get a 409A valuation. So you can always trust Carta as your source of truth for equity information. Carta capitalization tables update with every transaction, so it stays accurate with little effort.

Why choose a 409A cap table on Carta?

Carta has built-in checks to ensure compliance when issuing equity. Our checks include Rule 701, Rule 144, and the ISO $100K limit. With your cap table already on Carta, you can save time and money getting a 409A valuation. We are the leader in 409A valuations and are regularly audited by the “Big 4” accounting firms.

Is there a standard cap table format?

There’s no standard cap table format, and there are multiple ways to create one. We’ll walk you through a few ways to get started and include a free cap table template you can download. Cap table management is included with any Carta plan. Learn more about our plans and pricing.

How does Carta handle stock options?

When employees are ready to exercise options, Carta handles the entire transaction. Carta offers comprehensive support for all security types. Issue preferred stock, restricted stock awards, restricted stock units, profits interests, warrants, convertibles notes and SAFEs, and more.