Cap Table
Capitalization Table
Ledger of every security issued by a company — equity, preference, options, warrants, convertibles — and the ownership percentages they represent.
A cap table (capitalization table) is the canonical record of who owns what in a company. It tracks every issued security — equity shares, CCPS, CCDs, ESOP grants, warrants, SAFEs — by class, holder, issue date, certificate number, and consideration.
What a complete Indian cap table tracks:
- Equity ledger: shareholder name, PAN, folio/DP-Client ID, distinctive numbers, certificate numbers, issue date, consideration paid, holding %.
- Preference share ledger: separate by class (Seed Series, Series A CCPS, Series B CCPS), with conversion ratio, conversion price, dividend rate, liquidation preference, anti-dilution formula.
- Option ledger: grant ID, employee, grant date, vesting schedule, cliff, exercise price, vested, exercised, lapsed.
- Convertible instruments: SAFEs, convertible notes, CCDs — face value, conversion trigger, discount, valuation cap.
- Encumbrances: pledges, lock-ins, RoFR/RoFO restrictions, tag-along obligations.
Three views the cap table must produce:
- Issued — only shares actually allotted.
- Outstanding (as on date) — issued minus bought-back/cancelled.
- Fully-diluted — outstanding plus all convertibles, options (vested + unvested), warrants, SAFEs, on an as-converted basis. This is the basis on which valuations and pre-money/post-money are quoted.
Common errors at scale:
- Mismatch between cap table, Register of Members (MGT-1), PAS-3 allotment returns, and NSDL/CDSL beneficial owner data. Reconciliation breaks are the single largest source of due diligence delay.
- Treating ESOPs as 'pool' rather than tracking individual grants — fatal when calculating exercise tax (perquisite value) and dilution.
- Forgetting anti-dilution adjustments on CCPS after down rounds.
- Not modelling liquidation preference waterfall for a hypothetical exit.
Kapitalyze's Cap Table is the source of truth for all of the above and auto-generates MGT-1, SH-7, PAS-3, PAS-6 filings from a single ledger.
The dominant Indian VC instrument. Preference shares that must convert to equity by a fixed date — providing downside protection plus equity upside.
Hybrid debt instruments that must convert to equity by a fixed date. Treated as equity under FEMA; popular for FDI-route investments into Indian startups.
Equity-linked employee incentive scheme under Section 62(1)(b). Tax events at exercise (perquisite) and sale (capital gains). Min 1-year vesting period.
Reserved share capacity for future ESOP grants. Typically sized at 10–15% post-money. Pre-money expansion is a hidden founder-dilution cost.
Investor right that adjusts conversion price when a company issues shares at a lower price in a later round. Indian VCs typically take broad-based weighted-average.
Category of shares with distinct rights — equity vs preference; voting vs non-voting; ordinary vs Class A/B/DVR. Governed by Section 43 and the AoA.