When Should I Use CAP Table Management Software?

When you seek funding for your company, it is common for interested investors to ask you to provide a Capitalization Table (“CAP”). Review of the CAP Table is a normal part of the due diligence process. Your CAP Table is one of the most critical assets needed for raising money.

Be prepared!

What is a CAP Table?
A CAP Table is a chart that tracks the equity ownership of a company’s shareholders. The CAP Table enumerates founders, investors, or employees who own what amount of the business. The CAP Table lists all the securities your company has issued and who owns them.

Examples of Types of Securities:

Why do I Need a CAP Table?
Best practices dictate that companies must keep track of all pertinent information related to their stakeholders. Information includes debt, convertible debt, options, warrants, and derivatives holders, in addition to their claims on the company in one centralized location. Cap Tables are the industry standard to represent your ownership structure. Cap Tables can also be helpful to analyze events such as ownership dilution, issuing employee stock options, or issuing new securities.

How do I Create a CAP Table?
Many CAP Tables are managed in spreadsheets. However, you can run into scalability issues with spreadsheets. Traceability can also be a problem. Traceability problems result in error and miscalculation. Spreadsheets can also be time-consuming to maintain and update and prone to human error. CAP Table automation software is available and becoming more popular. As your company grows and your equity structures become complex, CAP Table automation software is something you should consider.

How is a CAP Table Formatted?
To save yourself a lot of pain and frustration, we profoundly recommend using CAP table management software from the beginning. Using CAP Table management software is especially important if you raise capital at any time in your business.

Where can I obtain CAP Table Management Software?
For all of your cap table and valuation needs, check out our partner, Carta, and receive an exclusive discount! Carta provides a suite of critical tools for building, maintaining, and continuing investments in your business. Carta is the industry standard.

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Become a WealthVP Qualified Company

Companies that meet the criteria for the WealthVP Expedition subscription level must participate in the WealthVP qualification process.

Why do we qualify companies? Investors are looking for quality deal flow. By qualifying companies, we are meeting the needs of our investor community by removing the burden of due diligence and helping streamline the deal process. Serious investors, able to fund larger deals, are attracted to “qualified” companies.

What are the benefits of obtaining a "qualified status"?

  • Qualified companies’ profiles receive a “WealthVP Qualified Company” designation Investors are able to conduct a filtered search for “qualified” companies.
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How do I get my company qualified?

WealthVP qualifies companies based on the four data points below. The process takes approximately 2 weeks and is free of charge.
  1. Ownership (Provide fully diluted CAP table)
  2. Addressable market size (Provide the research/resources you used to calculate your TAM)
  3. Revenue (Provide income statement)
  4. Proof of corporation or LLC (Provide Certificate of Incorporation or LLC agreement)

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