One document, the whole ownership story
A cap table (capitalization table) lists every holder of equity in a company, founders, employees, the option pool, and every investor, alongside how much of the company each one owns. Before you write a check, the founder should show you the current cap table, and you should be able to read it well enough to know exactly what you're buying into and who else already owns a piece of the outcome.
A sample early-stage cap table
| Holder | Shares | Ownership % |
|---|---|---|
| Founder A | 4,000,000 | 40.0% |
| Founder B | 3,500,000 | 35.0% |
| Option pool (reserved) | 1,500,000 | 15.0% |
| Prior friends-and-family SAFE holders | 800,000 | 8.0% |
| You (pending SAFE, at conversion) | 200,000 | 2.0% |
What to check before you sign anything
Three things are worth confirming every time. First, is the option pool already carved out, or will it be created at your round, which dilutes existing holders including you the moment it's added? Second, are there existing SAFEs from a prior friends-and-family round that haven't converted yet, since they'll convert alongside yours and change the final math? Third, does founder ownership still look reasonable for the stage, heavily diluted founders this early can be a signal of a messy prior round or a co-founder dispute worth asking about directly.
A cap table is a snapshot, not a forecast: everyone's percentage on this table will shrink at the next round (Lesson 4), which is normal and expected, not something to flag as a problem in itself.
Checkpoint
- A cap table lists every equity holder and their ownership percentage; ask to see it before investing.
- Check whether the option pool is already carved out, whether unconverted prior SAFEs exist, and whether founder ownership looks reasonable for the stage.
- A cap table is a snapshot; every percentage on it will shrink at future rounds.
If anything here still feels unclear, ask before moving to Lesson 8.