Share Capitalisation Tables
Are you a startup or an early-stage growth business looking for equity funding? One of the things you will find useful to prepare is a share capitalisation table. Share Capitalisation is more commonly known as a share cap table.
As the name suggests, it is a simple table setting out the company valuation and the number of shares. At its core, it is a simple but organised document showing the total ownership and share capitalisation of a business.
See your company valuations and share history
Every company might like to have one, but for most private companies, it doesn’t change much. If you are looking for funding, it is one of the essential information tools to show yourself and your potential investors. It is a handy way to quickly and easily show the share history and your company valuations.
Overall, a capitalisation table shows the total market value of a company and its components. Understanding the companies values is also especially important for unquoted companies because they set their valuations. Whereas quoted companies get this information from the market.
It forms a key point of reference for business managers – and should be considered in every financial decision that impacts market capitalisation and the company’s market value. As with all financial tools, the share cap table needs to be accurate. It needs to reflect the business’s needs and regularly maintained for decision making based on the most current information.
Update as you grow
As your company raises money and adds shareholders or has sweat equity or grants options to employees, you must update the table. So it also becomes a table that shows each investor’s stake in the business.
One really important point – and the reason the founders need a share cap table – is that you can easily track the dilution of your shares. One of the important (and sad but true) points of raising equity funds for your business is that you give away a proportion of the ownership for other people’s money. The key is not to give away too much! The share cap table helps you to keep track of this.
Help in on hand
If you are considering applying for funding and want some help with your share cap table then get in touch.