A cap table, or capitalization table, is a financial document that outlines a company’s equity ownership. It is a summary of the company’s outstanding shares of stock and the corresponding ownership percentages of those shares. The cap table also lists the company’s outstanding stock options and any other equity instruments, such as warrants or convertible debt.
A cap table is important because it helps to understand the company’s equity structure and the ownership stakes of its shareholders. It is also used to determine the value of a company and to evaluate potential financing options.
Why do I need a Cap Table?
Your banker may be requesting a copy of your cap table for several reasons. One reason could be to understand the equity structure of your company and how it may be impacted by any potential financing transactions. For example, if you are seeking a loan or investment, your banker will want to understand the ownership stakes of your shareholders and how the financing will affect their equity positions.
Another reason your banker may be requesting a copy of your cap table is to evaluate the potential risk of lending to your company. By understanding the equity structure of your company, your banker can better assess the potential for dilution of equity and the potential impact on the value of the company.
Overall, a cap table is an important financial document that helps to understand a company’s equity structure and can be used in a variety of financial transactions.