Getting investor-ready

What is a cap table and how do I keep mine clean?

Updated 2 June 20265 min readLedgers Team

On this page

What a cap table actually shows
A tiny example
Why investors care so much about it
How cap tables get messy (and how to keep yours clean)
How Ledgers keeps your cap table clean and ready

Getting investor-ready5 of 5

1.Get your startup financials investor-ready in a weekend
2.How to build a data room for your raise (the lean version)
3.The startup metrics investors care about (MRR, burn, runway, CAC)
4.What investors actually want to see before they invest
5.What is a cap table and how do I keep mine clean?

Quick answer

A cap table is the list of who owns what slice of your company. Here's what it means in plain English, a simple UK example, and how to keep yours clean and investor-ready.

A cap table is the list of who owns what slice of your company.

That's the whole idea. "Cap table" is short for capitalisation table, and despite the intimidating name, it's just a tally of ownership — who has shares, how many, and what percentage of the company that gives them.

If you've incorporated a company and split it with a co-founder, you already have a cap table, even if it's just two lines on a napkin. The question that matters isn't do I have one — it's whether it's clean, current and ready for the moment an investor asks to see it. Let's cover both: what it is, and how to keep yours from becoming a problem.

What a cap table actually shows

Picture a simple table. Each row is a person or entity that owns part of the company. Each row shows how much they own.

For a young startup, the rows are typically:

The founders — usually the biggest slices at the start.
Any early team or advisors who were given equity.
Investors — angels, SEIS/EIS backers, a seed fund — once you've raised.
The option pool — shares set aside to grant future employees (often not yet allocated to anyone).

And the columns tell you, for each: how many shares they hold, and what percentage of the total that represents. Add up the percentages and they make 100%. That's the company, fully divided.

A tiny example

Say you and a co-founder start a company with 1,000,000 shares, split evenly.

You: 500,000 shares (50%)
Co-founder: 500,000 shares (50%)

Then an angel invests through SEIS for 10% of the company. To give them 10%, you issue new shares. After the round, your cap table might look like:

You: 500,000 shares (45%)
Co-founder: 500,000 shares (45%)
Angel investor: ~111,000 shares (10%)

Notice two things. First, you and your co-founder still own the same number of shares — but a smaller percentage, because the pie got bigger. That's dilution (your slice shrinking as new shares are issued), and it's normal and expected when you raise. Second, every change has to be recorded accurately, or the percentages stop adding up to a true picture.

Why investors care so much about it

Your cap table is one of the first things an investor checks — often before your financials. There are two reasons.

It tells them what they're buying. An investor needs to see how the company is currently owned to work out how their investment fits, what percentage they'll get, and whether the existing split makes sense. A founder who's already given away 60% to advisors and friends-and-family is a harder bet.

It's a cleanliness test. A messy cap table — missing entries, shares that don't add up, undocumented promises of equity — is a screaming red flag. It signals legal risk and a founder who isn't on top of the details. Due diligence can grind to a halt on a single unexplained line. What investors actually want to see before they invest →

So your cap table is doing the same job as your reconciled accounts: quietly proving you run a tight ship. Get your startup financials investor-ready in a weekend →

How cap tables get messy (and how to keep yours clean)

Cap tables rarely go wrong in one big event. They rot slowly, through small undocumented decisions. Here's where the mess usually comes from — and how to avoid it.

Verbal equity promises. "I'll give you 2% for helping out" said over a coffee, never written down. Six months later nobody agrees what was promised. Fix: document every equity grant the moment it's agreed, in writing, before it slips.

Forgotten safes and convertibles. A safe or convertible loan note (money in now, shares later) doesn't show up as shares yet — so founders forget it exists, then get a nasty surprise when it converts and dilutes everyone. Fix: record every safe and convertible on the cap table as a pending line, with its terms.

Option pool confusion. Shares set aside for future hires, granted ad hoc with no central record. Fix: track the pool and every grant in one place, so you always know what's allocated and what's left.

Out-of-date percentages. The spreadsheet shows last year's split because nobody updated it after the last round. Fix: update the table the moment anything changes — a share issue, an exercise, a transfer.

The forgotten filing. In the UK, when you issue new shares you must tell Companies House within a month, using a form called an SH01. Miss it, and your official record and your cap table disagree — exactly the kind of discrepancy due diligence loves to find.

The theme is simple: a clean cap table is one where every change is recorded immediately and accurately, in one place, with nothing living only in someone's memory.

How Ledgers keeps your cap table clean and ready

Keeping a cap table clean by hand means remembering to update a spreadsheet every time anything changes — which is exactly the kind of admin that slips when you're busy building. Ledgers takes that off you.

The cap table model in Ledgers keeps a single, current record of who owns what — founders, investors, options, safes and convertibles — and updates the percentages automatically as shares are issued or change hands. When you issue shares to a new investor, the Companies House tracker flags the SH01 so the official filing doesn't get forgotten and your records stay in sync. And when an investor asks for it, your cap table exports as a clean DD-ready CSV in a click — ready for the data room, with nothing missing and the numbers adding up. How to build a data room for your raise →

Your ownership stays tidy and investor-ready without you babysitting a spreadsheet.

Ready to keep your cap table clean without the spreadsheet wrangling? In Ledgers, the cap table model stays current automatically, flags your Companies House filings, and exports investor-ready in a click. See your numbers without learning accounting → start free.

Raising soon? See what else they'll check: What investors actually want to see before they invest →

And get the whole picture tidy: Get your startup financials investor-ready in a weekend →

Frequently asked questions

What is a cap table in simple terms?

It's the list of who owns what slice of your company — each founder, investor, advisor and the option pool, with how many shares they hold and what percentage that is. Add the percentages up and they make 100%.

Do I need a cap table before I raise?

Yes. Investors check it early to see how the company is owned and how their investment will fit. A clean, current cap table is one of the first signals that you're a safe, organised founder; a messy one can stall a raise.

What makes a cap table "messy"?

Undocumented equity promises, forgotten safes or convertibles, an untracked option pool, out-of-date percentages, and share issues that were never filed at Companies House. The fix is recording every change immediately and accurately in one place.

What is dilution?

Dilution is your ownership percentage shrinking when the company issues new shares — for example, when you raise. You usually keep the same number of shares, but they represent a smaller slice of a bigger pie. It's normal and expected as you bring in investors.

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