VIDEO: What Is a Cap Table in Business

Imagine starting a company with two of your friends. You each put in some money, split the work, and agree to figure out ownership later. Fast-forward a few months you’ve raised funds from a few investors, hired early employees, and promised them a bit of equity too. Then comes the problem: nobody remembers who owns what anymore.

One person claims they have 40%, another says 30%, and the investors are asking for updated figures before they put in more money. Now everything seems to be falling apart. That’s exactly the kind of confusion a cap table prevents.

A cap table (short for capitalization table) tracks every shareholder, how many shares they hold, and what type of shares they have, all in one place. Think of it as the company’s ownership ledger, the one document that keeps everyone aligned and avoids unnecessary disputes down the line. Without it, founders risk losing their company, investors lose confidence, and employees can’t clearly see what their shares are worth.

That’s why, before you start raising money or even offering equity to anyone, it’s worth knowing what a cap table is and how it works. Watch the full video below as we break down what a cap table does, what goes into it, and why every startup, no matter how small, should have one.