Enter the total number of shares.
Enter the price per share.
History:

Explanation

What is a Capitalization Table (Cap Table)?

A Capitalization Table, or Cap Table, is a document that outlines the equity ownership of a company. It details the percentage of ownership held by each stakeholder, including founders, investors, and employees. This table is crucial for startups and companies seeking investment, as it provides a clear picture of who owns what and how much each share is worth.

How to Use the Capitalization Table Calculator?

The Capitalization Table Calculator allows you to input key variables to calculate the ownership distribution among different stakeholders. Here’s how to use it:

  1. Total Shares: Enter the total number of shares that the company has issued.
  2. Price per Share: Input the current price of each share.
  3. Founders Ownership (%): Specify the percentage of ownership that the founders hold.
  4. Investors Ownership (%): Enter the percentage of ownership attributed to investors.
  5. Employees Ownership (%): Input the percentage of ownership allocated to employees.

Key Formulas

The calculator uses the following formulas to determine the results:

  1. Valuation Before Investment: [ \text{Valuation Before} = \text{Total Shares} \times \text{Price per Share} ]

  2. Shares Owned by Each Group:

    • Founders Shares: [ \text{Founders Shares} = \text{Total Shares} \times \left(\frac{\text{Founders Ownership}}{100}\right) ]
    • Investors Shares: [ \text{Investors Shares} = \text{Total Shares} \times \left(\frac{\text{Investors Ownership}}{100}\right) ]
    • Employees Shares: [ \text{Employees Shares} = \text{Total Shares} \times \left(\frac{\text{Employees Ownership}}{100}\right) ]

Example Calculation

Let’s say you have the following inputs:

  • Total Shares: 1000
  • Price per Share: $10
  • Founders Ownership: 50%
  • Investors Ownership: 30%
  • Employees Ownership: 20%

Using the formulas:

  • Valuation Before: [ \text{Valuation Before} = 1000 \times 10 = 10,000 ]
  • Founders Shares: [ \text{Founders Shares} = 1000 \times \left(\frac{50}{100}\right) = 500 \text{ shares} ]
  • Investors Shares: [ \text{Investors Shares} = 1000 \times \left(\frac{30}{100}\right) = 300 \text{ shares} ]
  • Employees Shares: [ \text{Employees Shares} = 1000 \times \left(\frac{20}{100}\right) = 200 \text{ shares} ]

When to Use the Capitalization Table Calculator?

  1. Startup Planning: Founders can use this calculator to understand how equity is distributed among stakeholders.
  2. Investment Discussions: Investors can assess their ownership percentage and its implications on future funding rounds.
  3. Employee Equity Plans: Companies can determine how much equity to allocate to employees as part of their compensation packages.
  4. Financial Reporting: Use the calculator to prepare accurate financial reports that reflect ownership distribution.

Definitions of Key Terms

  • Total Shares: The total number of shares that a company has issued to its shareholders.
  • Price per Share: The current market price of a single share of the company’s stock.
  • Ownership Percentage: The percentage of total shares owned by a particular stakeholder group (founders, investors, employees).

Use the calculator above to input different values and see the ownership distribution change dynamically. The results will help you make informed decisions based on the equity structure of your company.