Cap Table Explained: How to Build One, with a Worked Example

Investors ask for your cap table early. Send a clean one and the conversation moves on. Send a spreadsheet with three tabs, two versions and a cell that reads “maybe 2%?” and you’ve invited an audit.

What is a cap table? Short for capitalisation table, it’s the list of who owns what in your company: every owner, every option, every convertible, with the percentages before and after each round. Ten minutes from now you’ll know how to build one, what changes when the company is an Italian SRL, how a funding round moves the numbers (a worked example runs from founding to seed) and which mistakes investors spot first. Brand new to this? The beginner’s map from zero to a first round shows where the cap table fits.

What is a cap table, and what goes in it?

Start from one question. If the company were sold tomorrow, who would get what share of the price? The cap table answers it, setting debts and special rights aside for now, with one line per holder: founders, early employees, angels, funds.

Rows are holders; the columns carry the detail. For each holder you record the instrument (shares, or quotas in an SRL, options, a convertible), the number or nominal amount, what they paid and when. Then come two percentages: what they own today, and what they own fully diluted. The second is the one investors read. It counts everything that could become shares or quotas, from the option pool reserved for future hires to every convertible as if it had already converted.

With every new round you own a smaller slice of a bigger company. That’s dilution. What the table can’t show is who gets paid first: a liquidation preference, the right to be repaid before others at an exit, can change the split of the proceeds.

How do you build a cap table? Six steps

1. Write down every holder by exact legal name, with the instrument and the date, going back to the founding deed and through each capital increase since.
2. Record what each one paid: nominal amount, premium and date.
3. Add the claims that aren’t ownership yet: the reserved pool, granted options with their vesting, and convertibles with amount, cap and discount.
4. Compute two percentages per holder, issued and fully diluted.
5. Model the next round before anyone asks: pre-money, new money, pool top-up, post-money. Our guide to pre-money versus post-money valuation has the formulas, and valuing a pre-revenue startup helps with the number.
6. Keep one dated version with a change log, and check it against the official record (in Italy, the Registro Imprese) whenever something changes.

A worked example: from founding to seed

Here’s an invented example, in euros, for an Italian SRL. Marta and Luca start a software company in Turin with €10,000 of capital, 55% for Marta and 45% for Luca. Over about three years three things happen, and the table shows who owns what after each one.

Holder	At founding	Paolo joins	Angel: €100k for 8%	Seed: €1.5M, 12% pool
Marta	55.0%	49.5%	45.5%	31.0%
Luca	45.0%	40.5%	37.3%	25.3%
Paolo	–	10.0%	9.2%	6.3%
Angel	–	–	8.0%	5.4%
Seed fund	–	–	–	20.0%
Option pool	–	–	–	12.0%
Total	100.0%	100.0%	100.0%	100.0%
Post-money valuation	–	–	€1.25M	€7.5M

Step one: a third partner, Paolo, comes in with 10%. His new quotas squeeze the other two by the same factor of 0.90: Marta goes from 55% to 49.5%, Luca from 45% to 40.5%.

Step two: an angel invests €100,000 and gets 8% once the money is in. That prices the company at €1.25 million post-money (100,000 ÷ 0.08) and €1.15 million before the cheque. Everyone shrinks again, this time by 8%: Marta’s 49.5% becomes 45.5%.

Step three: a seed fund offers €1.5 million at €6 million pre-money. That’s €7.5 million post-money, so the fund gets 20%. It also wants a 12% option pool for new hires, created before its money arrives. Both slices come out of the existing owners, who share what’s left: 100% − 20% − 12% = 68%. Marta’s 45.5% becomes 31.0%.

Two things to notice. The pool counts as ownership even though nobody holds it yet, which is why the fully diluted table is the honest one. And the pool lowers the real price: 12% of €7.5 million is €900,000, so the effective pre-money for the people already on board is €5.1 million, not €6 million. That’s often called the option pool shuffle, and our guide to the employee option pool covers how big the pool should be. A 2023 Carta analysis found seed-stage companies reserving 13 to 14% for employees.

Marta owns far less and holds far more on paper: 31.0% of €7.5 million is about €2.3 million, against 45.5% of €1.25 million, about €570,000, after the angel round. The three founders together keep 62.6%, a little above the roughly 56% Carta reports as the median for founding teams after seed. How big a round to raise is a separate question: start with our guide on how to raise capital for a startup in Italy.

Had the angel signed a post-money SAFE with a €1.25 million cap instead, the as-converted table would look the same: 8% before the seed. The SAFE would only turn into quotas at the seed, though, and if the seed priced the company below the cap it would convert at the lower price, giving the angel more than 8%. An SRL usually does the same job with a convertible loan. Either way it needs its own line, and SAFE versus convertible note explains how the two behave.

What changes in an Italian SRL?

An SRL has no shares. Its capital is split into quote (quotas), which the Civil Code says can’t be represented by shares (art. 2468). Each partner holds a fraction of the capital: Marta’s 55% of a €10,000 capital is a quota of €5,500.

The official record of who owns them is the Registro Imprese, the companies register. SRLs stopped keeping a libro soci with Law 2/2009, so the owner of a quota is whoever the register shows. A transfer takes effect towards the company once it is filed, within 30 days, by the notary who authenticated it (art. 2470), and a commercialista can file it too with a digital signature. The company’s certified extract, the visura, lists the shareholders. It won’t show an option, a convertible or a promise. So the register isn’t your cap table. It’s one of the documents your cap table must match.

New money normally arrives through a capital increase with a sovrapprezzo, the premium over nominal value. The partners vote it in a meeting whose minutes a notary draws up (art. 2480), existing partners have a pro-rata right to subscribe, and at subscription the investor pays at least 25% of the nominal amount plus the whole premium (art. 2481-bis). In our example only about €1,000 of the angel’s €100,000 would become nominal capital. The rest goes to the premium reserve.

The startup rules add flexibility. Innovative startups can create categories of quotas with different rights, such as no vote or a vote not proportional to the stake, and since 2017 every SRL that qualifies as an SME can do the same. They can also hold their own quotas to feed an incentive plan, something an ordinary SRL can never do (art. 2474). Our guide to Italy’s innovative startup status lists the requirements. In a US corporation the same information lives in shares, a stock ledger and an equity plan. The cap table is the working copy investors and lawyers pass around.

Spreadsheet or software?

At the start a spreadsheet will do, with one tab for holders, one for each round and formulas for the percentages. It stops being enough when employees hold options, several convertibles are open or an investor wants to test scenarios.

Software tracks grants, vesting and rounds and prints reports for the data room. Prices move, so check them yourself: Carta Launch, for instance, is free for startups with under 25 stakeholders and less than $1 million raised. Make sure you can export your data, and keep a dated copy outside the tool. For an SRL, no tool replaces the Registro Imprese.

Which mistakes do investors spot first?

Dead equity comes first. Say a co-founder quits after eight months holding 40% and no vesting, the schedule that releases shares over time. The company now carries a large owner who no longer works for it, and every future investor sees that on page one. Carta calls four years with a one-year cliff (nothing vests before the first anniversary) the standard for founders. If it has already happened, fix it by agreement before the round, for example with the other partners buying the quotas back. Our guide to the co-founder equity split shows how to avoid it from day one.

Next, promises nobody wrote down. One percent to an advisor, a few options to the first hire, a handshake with an angel who’ll get in at the next round. None of it is on the table, and all of it surfaces in due diligence, when investors check the table against the Registro Imprese and the signed documents. Write every promise down, with a date, the day you make it.

Then the crowd of small angels. In Italy it’s normal to have several: the IBAN survey for 2025 found that 81% of angel deals were syndicated, with an average of six angels per deal. Six small lines are manageable. Twenty-five, each one a vote to chase on every shareholder decision, are not. Grouping small angels in one vehicle, a syndicate or an SPV, leaves you one line to manage.

Your checklist before the next round

• One dated file, one owner (you or your accountant), a change log.
• Every holder named exactly as in the deed and the Registro Imprese.
• Every option, convertible and promise recorded, with date and terms.
• Fully diluted percentages next to the issued ones.
• A model of the next round: pre-money, new money, pool, post-money.
• Vesting in place for founders, and every unsigned promise signed or withdrawn.
• Small angels grouped, or at least listed with their contact details and rights.

This article is general information, not legal or tax advice. Rules change: check with a notary or a commercialista before you issue quotas or sign an investment agreement.