Cap Table
Also known as: Capitalization Table
Definition
A capitalization table shows who owns the company and what securities, preferences, options, warrants, SAFEs, notes, or other claims affect proceeds. Clean cap tables reduce transaction delay and prevent surprises during diligence.
Cap table cleanup is exit-readiness work. Buyers and bankers need to know who can approve the deal, who gets paid, and what preferences or side agreements affect proceeds.
Messy ownership records create avoidable friction at the worst point in a process.
Related terms
- Earnout — A contingent purchase-price mechanism that pays sellers after close if agreed revenue, EBITDA, retention, or operational milestones are achieved.
- Enterprise Value — The total value of a business independent of capital structure, typically equity value plus debt minus cash.
- Letter of Intent (LOI) — A non-binding transaction proposal that sets price, structure, exclusivity, diligence scope, and major conditions before definitive agreements.
Where this gets applied
- Financial Infrastructure — ARR waterfalls, deferred-revenue rules, board-pack standardization, FP&A architecture.
- Exit Readiness — Pre-LOI cleanup. Financial reporting normalization, contract hygiene, IP assignment review, customer-concentration mitigation.