Reading Cap Tables

Cap tables tell the story of a company’s equity. Cap tables inventory who owns what portion of the company, along with who has rights convertible into an ownership stake in the company. In an M&A scenario, lawyers review and reconcile cap tables against the equity picture of a company that emerges from conducting due diligence on the company. In investment scenarios, both the company raising money and its potential investors use cap tables to determine how the investment round impacts each stakeholder and the investors’ profit potential. In any scenario, cap tables require those reading or reconciling them to understand equity documentation and how to do equity math—so, it’s no coincidence, that’s what this course teaches.