A well-organised cap table is an essential tool for growing companies. Acting as a source of truth for shareholder info, the document tells you ‘who owns what’ in your company and helps you:
- See how many shares are in your option pool
- Tell shareholders how much they own
- Understand how to price fundraising rounds
- Raise money and work with investors more effectively
Because there’s no “right” way to make a cap table, the final format of your company’s cap table will depend you plan to use it and the questions you want it to answer.
In this guide, we’ll show you how to create a cap table for your company with a method that suits your needs and budget.
Option 1: Build your own cap table from scratch
If you’re a whiz with spreadsheets, you could use Excel or Google Sheets to build your company’s cap table from scratch.
Benefits: It’s free
It won’t cost you any money to make your own cap table in Excel or Google Sheets. And starting from scratch means you can tailor the cap table to your company’s unique requirements. When you’re done building your own cap table, you’ll have a document that records company ownership and delivers the insights you need.
Drawbacks: Large room for error and difficult to scale
Cap tables tend to become more complex over time. While you can use a basic template to guide the creation of your cap table spreadsheet, if you’re not sure what you’re doing it’s easy to make mistakes and omit critical information.
Similarly, a simple cap table might be perfect for your company while it’s just getting started and there are only one or two shareholders. But it can be difficult to upgrade and maintain accuracy when your company scales and takes on investment. Errors can be hard to catch if stakeholders are working with multiple versions of your cap table document.
How to make your own cap table from scratch
To create your own cap table from scratch, just open up Excel or Google Sheets and get started.
Google Sheets is great for allowing your team to collaborate in a single document, and the app auto-saves all of your change history. Excel has a broader range of powerful formulas and it tends to be the software of choice for creating and managing cap tables.
Whichever spreadsheet software you use, your end-goal is to make a cap table that shows “who owns what”. To do that, be sure to:
- Keep your cap table simple and well-organised
- Make sure your cap table answers the right questions
- Tailor the cap table to your corporate documents
- Use consistent naming conventions
- Retain stockholder and optionee data (e.g. physical address, non-work email)
- Create your cap table in Google Sheets (good for visibility and team collaboration) or Excel (tends to have a better range of powerful formulas)
At the very least, your cap table should include the following information:
- Names of shareholders (founders, executives, employees, investors) who own shares in the company.
- Number of shares owned by each shareholder
- Stock options owned by each shareholder
A common format is to list the names of investors on the Y-axis, and list the types of securities on the X-axis.
Option 2: Use a cap table template
You can download and use cap table template as-is. Or you can use the template as a starting point to create a fully customized cap table for your company.
Benefits: It’s a quick, simple way to generate a cap table
If you’re short on time, or you’re not really sure how to go about designing a cap table, a basic cap table template is a good solution. Cap table templates can be free or paid. Once you’ve found a template that works for your needs, simply insert your company info and put the right systems in place to make sure it’s well-maintained over time.
Drawbacks: Easy to mismanage, and your company will probably outgrow it
While a cap table template is a great starting point, you’ll need to make improvements to it as your company changes over time. A customised cap table, tailored to include data and information specific to your company, will be necessary as you engage in growth activities like fundraising and issuing options. Be sure to hire a corporate secretary or qualified professional to manage and upgrade your cap table when your company grows in size and complexity.
How to get started with a cap table template
We’ve created a free cap table template to help entrepreneurs make a basic cap table.
Download our free cap table template here and start using it in minutes.
Option #3: Use cloud-based corporate governance software
Tracking ‘who owns what’ is easy when your company is just starting out. When you start raising money and issuing stock, managing your cap table becomes a complex task.
Cloud-based corporate governance software isn’t free, but the investment more than pays for itself by saving you (and your corporate secretary) time and greatly reducing the room for making errors in your cap table.
Benefits: Company ownership information is accurate, secure, and easy to access
A cloud-based platform with a cap table feature like Zave automates much of the setup and management involved in maintaining a cap table. Because the software hosts your cap table in the cloud, you don’t need to worry about sending the latest version of your cap table to stakeholders whenever something is changed. Anyone with access can simply log in and view an up-to-date version of your company’s cap table from wherever they are in the world.
Drawbacks: It costs money
Investing in software to create and maintain your company’s cap table is more expensive than using a free spreadsheet. Although the cost for cloud-based governance software may seem more like a “want” than a “need”, the ROI is in the time and money it can save you in the long run.
How to create a cap table using corporate governance software (Zave)
Once your corporate secretary inputs the necessary company information into a corporate governance platform like Zave, you’ll be able to see your cap table and share it securely with other stakeholders.
Follow these steps to create a cap table with Zave.
Create a Zave account
Start a free 30-day trial or choose a subscription right away. You’ll need to choose the Standard Plan to create and manage a cap table in Zave.
Invite your corporate secretary into Zave
Your corporate secretary will need to be a ZaveHub user to manage your company’s corporate governance with Zave. If your corporate secretary isn’t already a Zave Partner, send them an invite.
If you don’t have an online corporate secretary yet, you can find one via the Zave Partner Directory.
View and share access to your company’s cap table
Your corporate secretary will request all of the necessary business information to set up your account. Once they’ve added the relevant company information into Zave, you’ll be able to view and share your cap table in minutes.
If you’re looking for the easiest way to create a cap table for your company, we’d love to show you how Zave can help. Learn more about our features, take a video tour, and start a free trial today.
Leave a Reply