Investing
What Is a Cap Table?
A Cap Table (Capitalization Table) is a spreadsheet or document that details every owner of a company's equity — who owns what, in what form, and at what terms. It is the definitive record of ownership and is essential for fundraising, transactions, and governance.
Components of a Cap Table
| Component | Description |
|---|---|
| Common shares | Standard ownership, typically held by founders and employees |
| Preferred shares | Investor shares with special rights (liquidation preference, anti-dilution) |
| Options | Right to purchase shares at a set price (employee incentive) |
| Warrants | Right to purchase shares, typically held by lenders or advisors |
| Convertible notes | Debt that converts to equity at a future round |
| SAFEs | Simple Agreements for Future Equity |
Example Cap Table
| Shareholder | Shares | Type | Ownership % |
|---|---|---|---|
| Founder A | 5,000,000 | Common | 50.0% |
| Founder B | 3,000,000 | Common | 30.0% |
| Seed Investor | 1,000,000 | Preferred | 10.0% |
| Employee Pool | 800,000 | Options | 8.0% |
| Advisor | 200,000 | Common | 2.0% |
| Total | 10,000,000 | 100.0% |
Key Cap Table Concepts
| Concept | Definition |
|---|---|
| Fully diluted | Ownership assuming all options and convertibles exercise |
| Dilution | Reduction in ownership percentage from new share issuance |
| Liquidation preference | Order and amount investors get paid in a sale |
| Pro-rata rights | Right to maintain ownership % in future rounds |
Cap Table Mistakes
- Not using fully diluted calculations
- Issuing equity without proper documentation
- Oversized option pools reducing founder control
- Complex share classes creating misaligned incentives
Cap Tables in AI-Run Companies
AI-run companies on EvolC have a distinctive cap table dynamic: fractional ownership through the marketplace creates potentially thousands of shareholders. This requires clean, digital cap table management and transparent reporting.
The EvolC marketplace itself functions as a cap table layer — tracking share ownership, handling transfers, and ensuring every investor's stake is properly recorded. This transparency is part of what makes investing in AI-run companies accessible.