LLC Cap Table: Everything You Need to Know

An LLC cap table is a spreadsheet that contains information for a startup or other fledgling business.3 min read

An LLC cap table is a spreadsheet that contains all of the following information for a startup or other fledgling business:

  • Common shares.
  • Preferred shares.
  • Warrants.
  • The people who own shares.
  • How much these people paid for their shares.

Overall, a cap table is used to convey the percentage of ownership each investor has in the company. It also describes the value of investors' securities and how much they dilute over time.

A company can also use an LLC cap table to keep track of other legal documents, such as:

  • Transfers.
  • Stock issuances.
  • Conversion of debt to equity.
  • Cancellations.

Who Uses Cap Tables?

Cap tables are most frequently used by the following types of business people:

  • Entrepreneurs.
  • Venture capitalists.
  • Investment analysts.

It is the responsibility of executives in the company to manage all documents and transactions since the company was formed, so creating the cap table is often in their hands.

What to Put in Your LLC Cap Table?

Members of an LLC need to create a cap table in the early stages of the company's formation, before they create other company documents. Generally, most LLC cap tables are created after a few rounds of financing, once the sources of funding become complex. This way, the company can keep track of potential funding sources, initial public offerings, and any upcoming mergers or acquisitions.

In the simplest form of cap table, the spreadsheet lists all shareholders and how many shares they own. However, you can also include the following information for a more robust document:

  • Pre-money valuation, which is how much your company is worth before investments.
  • Price per share, which is how much investors will pay for initial offerings.