The Ownership Map of Your Startup
A cap table, or capitalization table, is a simple spreadsheet that shows who owns how much of a company. Think of it as the scoreboard for shares. When you raise startup funding, investors look at this table first. A clear cap table can speed up a deal; a messy one can kill it. In this guide we break down the basics.
1. Why a Cap Table Matters
- Tracks ownership: Shares, stock options, SAFEs, and notes all in one place.
- Shows dilution: How each new round changes percent ownership.
- Guides decisions: Helps founders see the impact of giving more equity to investors or employees.
- Builds trust: Clear numbers tell investment companies in Egypt that you manage details well.
Main Parts of a Cap Table
| Column | What It Means |
| Name | Shareholder or option holder |
| Security | Common, preferred, option, SAFE |
| Shares Owned | Number of units |
| % Ownership | Shares ÷ Total shares |
| Investment | Cash paid or sweat equity |
| Notes | Vesting schedule, class rights |
Keep the file in Google Sheets or use tools like Carta or Eqvista. Name rows clearly: “Founder A,” “Seed Fund,” “Option Pool.”
Understanding Dilution in Simple Steps
Dilution means each owner holds a smaller slice when the pie grows. Example:
- You and a co‑founder each hold 500 000 shares (1 million total).
- A seed investor buys 250 000 new shares.
- New total shares = 1.25 million.
- Your stake drops from 50 % to 40 %. You lost nothing in share count, but your percent shrank.
Dilution is normal in company funding stages, but you must track it.
The Option Pool Explained
An option pool sets aside shares for future hires.
- Typical size: 10 % at seed, maybe 15 % at Series A.
- Why investors ask for it: They want the team motivated without more dilution later.
- Tip: Negotiate pool size before calculating investor percent. This keeps founder ownership higher.
Liquidation Preferences Made Easy
Preferred shares often have a liquidation preference. It tells who gets paid first if the company sells.
- 1× non‑participating: Investor gets money back, then nothing more.
- Participating: Investor gets money back and shares in leftover.
Founders should push for 1× non‑participating to protect upside. Explain this in plain words to early angels; simple terms speed deals.
SAFE Notes and Convertible Notes
Early rounds may use SAFEs (Simple Agreement for Future Equity) or convertibles.
- SAFE: Converts into shares at next round, often with a cap (max price) or discount.
- Convertible note: A loan that turns into shares later, adds interest.
Track each SAFE or note on the cap table with its cap, discount, and date. This avoids surprises when they convert.
Scenario Modeling—Why Tools Help
Tools like Carta or free Excel templates let you model “what if” cases:
- What if we raise $1 million at $8 million valuation?
- What if we increase the option pool to 15 %?
Seeing the numbers helps you choose smart steps and shows venture capital funds that you plan ahead.
Common Cap Table Mistakes and Quick Fixes
| Mistake | Risk | Fix |
| Missing option pool | Surprise dilution | Add pool row from day one |
| Rounding errors | Wrong % | Use formulas, not manual typing |
| Unvested founder shares | Founder exit shock | Add 4‑year vesting with 1‑year cliff |
| Multiple share classes not labeled | Confusion in due diligence | Use clear tags: Common, Seed Preferred |
A Real‑World Example from Egypt
A Cairo edtech startup had three founders at 30 % each and 10 % advisor shares with no vesting. They raised $500 k seed, but advisor left after six months. Investors demanded the cap table be cleaned. Founders clawed back 8 % from advisor, set a proper option plan, and used Carta to track. Six months later they closed $3 million Series A without issues. Lesson: tidy tables attract startup investment.
Steps to Build Your First Cap Table
- Open a sheet and label columns (name, shares, %).
- List founders and split shares (add vesting).
- Add option pool row (10 %).
- Add investors with shares and price.
- Check % = 100 %.
- Share read‑only link with lawyers and mentors.
Tips for those who Love Numbers
- Practice with a mock startup: give each classmate shares and model a seed round.
- Use Google Sheets formulas: =round(shares/total,3) for % ownership.
- Watch YouTube demos on Carta basics.
Conclusion: Your Map, Your Future
A cap table is more than a file; it is the map of your company’s future. Keep it simple, correct, and updated. Track dilution, set fair option pools, and learn basic terms like liquidation preference. When venture capital egypt investors ask for the cap table, you will send a clean link in seconds, proving that you handle details like a pro. Clear tables bring faster closes, better terms, and stronger trust—vital keys for every round of funding startup growth.