Cap table management refers to the process of maintaining, updating, and organizing a company’s capitalization table, which tracks equity ownership, stock options, convertible notes, and investor stakes. Effective cap table management is crucial for fundraising, equity distribution, and investor relations, ensuring transparency and compliance as a company grows.
Why is cap table management important for startups?
A well-managed cap table helps startups track ownership, prevent dilution issues, plan fundraising rounds, and maintain investor trust.
What are common mistakes in cap table management?
-Poor record-keeping leading to ownership disputes. -Not tracking dilution from new investment rounds. -Lack of transparency with investors and employees. -Manually managing cap tables instead of using specialized software.
What tools help with cap table management?
Startups use cap table software like Carta, Pulley, or Eqvista to automate equity tracking, scenario modeling, and compliance.
How does cap table management impact fundraising?
Investors review cap tables to assess equity structure, founder dilution, and future funding potential before making investment decisions.
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