Record of who owns what in your company. Founders, investors, option holders. Shares, percentages, valuations. Must be accurate and up-to-date.

Can I use a spreadsheet for cap table?

Works for very early stage. Gets messy fast with options, rounds, convertibles. Migrate to proper software (Carta, Pulley) before raising or hiring significantly.

What does cap table software cost?

Pulley: free tier for early stage. Carta: starts ~$1000/year. Others vary. Worth the investment to avoid mistakes. Gets expensive at scale.

What is a 409A valuation?

IRS-required valuation for setting option strike price. Must be done by qualified firm. Needed before issuing options. Usually $1-5K. Valid 12 months typically.

How do I set up an option pool?

Reserve shares for future employees. Typically 10-20% at formation, expand at funding. Dilutes founders. Board approval needed. Plan ahead.

What's the difference between shares and options?

Shares: you own them. Options: right to buy at set price. Founders usually get shares. Employees usually get options. Different tax treatment.

Earn equity over time. Standard: 4 years with 1-year cliff. Unvested shares return to company if you leave. Protects all stakeholders.

Should founders have vesting?

Yes, typically. Protects remaining founders if one leaves early. Investors require it. Usually 4-year vest, sometimes accelerated for founders.

What is an 83(b) election?

IRS form to pay tax on restricted stock at grant. Must file within 30 days. Beneficial if value increases. Founders should almost always file.

How do I issue stock options?

Board approves pool and grants. Stock option agreement with employee. 409A valuation sets price. Cap table software handles paperwork.

What happens to options when someone leaves?

Vested options: usually 90 days to exercise post-termination. Unvested: forfeited. Check your plan. Exercise costs money and may trigger taxes.

How do SAFEs and convertibles show on cap table?

Not on cap table until they convert. Track separately as outstanding instruments. Convert at next priced round. Show on cap table pro forma.

What is fully diluted cap table?

Shows ownership assuming all options exercised and convertibles converted. Investors want this view. Different from current issued shares.

How do I handle equity mistakes?

Fix early. May need board resolutions, amended documents. Get legal help for significant issues. Common to find issues during due diligence.

What records do I need to keep?

Board resolutions, stock certificates or notices, option agreements, exercise records, 83(b) elections, 409A reports. Keep everything. Software helps.

Back to all problems

Solution illustration for I need to manage our cap table and equity properly

Critical Priority

Cap Table Management Tools for Growing Startups

Know exactly who owns what at all times

2-4 hours

Founder, Finance, Legal

About This Problem

Cap table chaos kills deals. You need clean records of who owns what, proper equity grants, and a system that scales with you.

You might have this problem if:

✓Tracking equity in a messy spreadsheet
✓Not sure what percentage each founder owns
✓No formal stock option grants for employees
✓Investors asking for cap table and it's a mess
✓Worried about making mistakes with equity

Success Looks Like

Cap table in proper software
All equity grants documented
Ready for investor due diligence

Relevant For

pre-launch stagelaunch stagegrowth stagescale stage

Cap table management is critical from day one — messy equity records have killed fundraising rounds and even acquisitions. Your cap table tracks who owns what percentage of your company, including founder shares, employee stock options, investor stakes, and convertible notes. A spreadsheet works briefly, but it quickly becomes error-prone and unauditable. Dedicated cap table tools keep your ownership records clean, model future dilution scenarios, and generate the reports investors expect to see.