![]() The pro-forma cap table must account for potential conversions of convertible debt or SAFEs (if the financing round triggers a conversion).The pro-forma cap table shows how the cap table would change should the financing round go through.The key differences between pro-forma capitalization tables and “regular” cap tables are: Here’s an example of what one might look like: There is no set format for a pro-forma capitalization table. It allows the parties to model out exactly how the company’s ownership will change as a result of the financing round. This is a version of the cap table that shows the updated company ownership after a financing round closes. What Is a Pro-Forma Capitalization Table?ĭuring financing discussions, the parties usually prepare a pro-forma capitalization table. Conversion terms (including valuation cap or discount rate, liquidation preferences, and anti-dilution provisions).They might be listed in a separate section in the cap table, with the following details: This is because the number of shares they will convert to-and thus their holders’ ownership stakes-usually depends on what happens in the next priced equity round. Note that SAFEs and convertible debt are often not listed in the “main” section of the cap table. Here’s what a capitalization table looks like on AngelList Stack: Complete list of shareholders (including type of shares they own, total number of shares, and percentage ownership stake).Valuation details of the last priced round (including pre-money valuation, amount of new equity raised, per-share price, and number of shares).While there's no set format for a cap table, every cap table should contain the following details: In other words, a cap table is a comprehensive listing of what an investor would want to know about a company’s ownership. It also shows how much of each security type each investor owns, the value of their respective stakes, and their current ownership percentage. What is a Capitalization Table?Ī cap table lists out all of a company’s securities-such as common shares and preferred shares, options, SAFEs, convertible notes, and warrants. We’ll also look at how cap tables evolve over time-and why they tend to get progressively more complex. Angel list stack how to#In this guide, we’ll go over why cap tables are so important and how to read both a pre-financing cap table and a post-financing cap table (known as a “pro-forma” cap table). Therefore, understanding how to interpret them as an investor is vital. The cap table is a key due diligence item because it reveals how every stakeholder is impacted by a fundraise. As a startup grows, its cap table is likely to become progressively more complex.Ī cap table-short for capitalization table-is a spreadsheet that breaks down who owns what in a startup.Cap tables are critical documents that help both founders and investors make more informed decisions regarding the company.A capitalization table details a startup’s ownership breakdown. ![]()
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