The CapTable Conundrum

A CapTable or a Capitalization Table is a record of all your company’s ownership securities - including but not limited to common stock, preferred shares, equity awards, convertible notes, warrants and options - as well as who owns them, and how much.

Why shouldn’t we manage our cap table in spreadsheets?

Spreadsheets would have sufficed if there were only a small handful of stakeholders consisting mostly of ordinary shares. However, nowadays it is common even in young start-ups that ownership structures are not that simple.

Some firms tend to frequently move on to their next round of financing in a short span of time. Thus, their cap table gets progressively harder to manage with each new round.

Different stakeholders should have different informational views allowed to them. It is time consuming and often prone to inaccuracy each time you have to tailor create their specific cap table views. Spreadsheets are also not dynamic enough to update and show the change experienced by each stakeholder overtime.

How effective is my company’s cap table spreadsheet at calculating my employee’s equity awards?

Apart from the many jargons and tax implications involved in equity awards, a spreadsheet is convoluted with all the different securities and schedules relating to the equity awards.

Most employees are simply concerned with

• “What does this equity award mean?
• How much value does this create for me in each scenario?”

A software-based approach allows equity award’s value proposition to be succinctly, accurately, continuously and systematically be distilled and communicated to each employee.

It also allows non-financially savvy stakeholders to perform complex financial analysis with a few simple clicks given a digitized cap table and ESOPs. Thus, removing the need to perform complex financial analysis, saving both time and money for quicker decision making.

Why should I get my portfolio companies to digitalize their cap tables?

After investing in companies, you will still be interested in updates on ownership for reporting and compliance purposes. A digitalized cap table grants you access around the clock and ensures the information is accurate and in a user-friendly format, saving you both time and money5. By utilizing Qapita’s software solutions, you can reap network effects from all your portfolio companies with one consolidated view on our platform and effectively eliminate previously incurred costs. This allows you a single accurate record across a wide array of companies at a glance.

How do I digitalize my Cap Table? Talk to team Qapita to make your equity management completely hassle free.

‍