A Startup Cap Table is essentially a spreadsheet, usually used by young start-ups or budding early stage companies, which outlines the ownership structure of the organization. The startup cap table describes who owns what, the way in which shares are valued and what value there is to the ownership stake. It’s vital for any new business to have this sheet to keep track of its costs and assets. If startups starting out with your business, or have recently raised funding, then this is absolutely critical.

One important aspect of this startup cap table template is the total number of shares you own when you first invest. Note that in startups , we don’t typically refer to individual stock holders, but instead to company shares. The numbers here will likely change once you get a better idea of how you want to use the spreadsheet. For instance, if you’re working with an investor or venture capitalist, you may want to note down the total number of shares each of you owns individually.

startups of a startup cap table template is the section detailing new investments that have been made during the past year. This is where you’ll write in the name of the investor or partner who made the investment, the amount they invested and the date the investment was made. Note that some funding sources require you to provide documentation on each and every investment, including the percentage that has been returned. Other sources simply don’t require this information.

One crucial piece of information that must be noted in the cap table is the description of the early investors or partners. In many templates, this section is simply left blank. It’s critical to include at least three names of the earliest investors or partners when using this section. New entrepreneurs should also note the type of partnership (i.e., general partnership, limited liability company or corporation) that they were associated with during their founding days. If your business plan is being prepared as part of a startup acquisition strategy, you’ll want to know which venture capitalists you have signed agreements with in the past.

As startups grows and more investors are added, it becomes more important to note the price per share that these newer investors are paying. In general, entrepreneurs want to be competitive with other start-up companies when it comes to valuation. If the startup becomes too crowded with investors’ shares, the enterprise may not be able to compete for investor attention. Therefore, adding new investments, even if they are relative newcomers, should be strongly considered in a startup cap table.

A startup cap table should also give an accurate picture of future equity shares and ownership structure. To give an idea, if your business has five equity shares, there’s a good chance that later on, two of those equity shares could be owned by someone else. As an entrepreneur, it is highly unlikely that you can keep all of your shares, especially if your business experiences growth. If you enter into a venture capital financing round, some of your shares may be sold to funders for conversion to cash.

It is also important for potential investors to be familiar with startup founders and their unique attributes. In general, the best entrepreneurs are risk averse, conservative and experienced. Other entrepreneurs may be aggressive, enthusiastic, young and inexperienced. Therefore, you should tailor your business plan to highlight the strengths and weaknesses of each potential founder. As long as the entrepreneur includes details, it will be easier for you to obtain startup capital as needed.

In conclusion, the goal of a startup cap table is to provide investors with a well-rounded picture of your business idea and its unique characteristics. In addition, the cap table should highlight potential convertible shares that new owners may have the ability to purchase at a future date. The information provided should be current and include company information, business plans, financial statements and other relevant financial documents. By providing investors with this information, you can help them to become more informed about the startup business and give them the confidence to invest in your startup.