startup cap table template

Equity Ownership and Dilution Management Protocol

Document Control

• Document ID: TR-FIN-042
• Version: 1.0.0
• Effective Date: [__________]
• Review Cycle: Quarterly

1. Purpose & Scope

This procedure establishes the structural requirements for maintaining a definitive record of [Company Name]’s equity ownership. It covers the tracking of common stock, preferred shares, option pools, and convertible instruments to ensure accurate valuation and dilution analysis during financing rounds.

2. Prerequisites

• Tools: Spreadsheet software (Excel or Google Sheets) with audit-trail capability.
• Materials: Executed Stock Purchase Agreements (SPAs), Board Consents, Option Grant Agreements, and SAFE/Convertible Note documents.
• Access: Secure cloud storage with restricted read/write permissions limited to [Title/Role].

3. Roles & Responsibilities

4. Step-by-Step Procedure

Phase 1: Foundation and Ledger Initialization

• Define total authorized shares in the [Company Name] Articles of Incorporation.
• Create a "Summary" tab listing total shares issued, reserved, and remaining.
• Create a "Shareholders" tab with columns: Name, Date of Issuance, Class of Stock, Number of Shares, and Percentage Ownership.

Phase 2: Data Population and Instrument Tracking

• Input all founding equity grants, ensuring the sum matches the initial capitalization.
• Create a "Convertibles" tab to track SAFEs, Convertible Notes, and Warrants.
• Input "Fully Diluted" calculations to include the unallocated Option Pool.

Phase 3: Ongoing Maintenance and Compliance

• Update the ledger within [__________] business days of any board-approved equity event.
• Reconcile the ledger against the formal [__________] stock ledger annually.
• Perform a "Pre-Money" and "Post-Money" scenario analysis prior to any new funding round.

5. Quality Assurance, Pro-tips, and Pitfalls

• QA: Perform a "Sum Check" weekly to ensure the total shares issued + reserved + unissued equals the total authorized shares.
• Pro-tip: Use conditional formatting to highlight shareholders who hold >[__________]% of the company to monitor major investor thresholds.
• Pitfall: Failing to account for the "Option Pool Shuffle"—always calculate dilution based on the post-money pool size required by investors.
• Pitfall: Forgetting to update the ledger after the exercise of stock options.

6. FAQs

Q: How do I handle convertible notes in my ownership calculations? A: Convertibles should be tracked in a separate tab detailing the valuation cap and discount rate. In your summary view, reflect these as "as-converted" shares based on the most recent valuation trigger.

Q: Should I include unissued options in my ownership percentage? A: Yes. For professional fundraising, you must use a "Fully Diluted" basis, which includes all issued shares, all outstanding options, and the entire unallocated option pool.