Cap table 2026: mastering your capitalisation table
The cap table records who holds what in a company: shares, employee warrants, investor warrants, convertibles. Keeping it up to date and reasoning fully diluted is vital before any raise.
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Quick answer. The cap table, or capitalisation table, records the breakdown of a company's capital: who holds how many shares, plus the instruments giving access to capital (employee warrants, investor warrants, SAFE-style warrants, convertible bonds). Well kept, it is read fully diluted, that is, including all securities that may be converted. It is the reference tool to anticipate dilution before a raise or a sale.
The cap table is the most strategic governance document of a start-up, and one of the most often neglected early on. Poorly kept, it holds nasty surprises when raising funds or selling. Understanding what it contains and how to read it is essential for any founder. Here is the gist.
What the cap table contains#
The cap table goes well beyond the mere list of shareholders.
It records the shares held by each party, founders and investors, but also all the instruments that may one day become shares: employee equity warrants granted to staff, investor warrants, SAFE-style warrants, convertible bonds. Each of these instruments represents potential dilution, that is, shares that do not yet exist but will appear on conversion.
Ignoring these instruments gives a distorted view of the real breakdown of capital, a subject linked to seed instruments such as warrants and convertible bonds.
Fully diluted capital#
The relevant reading of a cap table is done fully diluted.
Fully diluted capital includes, beyond existing shares, all securities likely to be converted into shares: employee warrants, investor warrants, convertibles. It is this view that gives the real breakdown of power and value, once all instruments are exercised. A founder reasoning on existing shares alone overestimates their stake: on conversion of the outstanding instruments, their holding mechanically dilutes.
This is why any raise negotiation is conducted fully diluted, to measure the founders' real dilution at the round considered, as we detail for the seed to series A raise.
Keeping the cap table up to date#
A cap table only has value if it is rigorously kept over time.
Every capital operation, increase, employee warrant grant, warrant issue, instrument conversion, must be recorded immediately. A neglected cap table becomes unreadable and wastes precious time during a raise, when the investor demands an exact snapshot. Consistency with the articles, the share transfer register and the shareholders' agreement is essential: a divergence spotted weakens the whole operation.
| Tracked item | Why it matters |
|---|---|
| Shares per holder | Basic capital breakdown |
| Granted employee warrants | Dilution from staff incentives |
| Investor and SAFE warrants | Dilution from investors |
| Convertible bonds | Deferred dilution on conversion |
| Fully diluted capital | Real breakdown after conversion |
Our view#
The cap table is not an administrative table, it is a capital steering instrument. A clear and up-to-date cap table reassures investors, speeds up raises and avoids conflicts over the breakdown.
Our advice is to keep it from creation, to reason systematically fully diluted, and to simulate the effect of each future operation, raise, warrant grant, conversion, on the founders' holding. Anticipating dilution allows negotiation in full knowledge and preserves the motivation of the founding team. A neglected cap table is paid for dearly at the moment it matters most: the raise or the sale.
A common case#
Founders had granted employee warrants and issued SAFE-style warrants without keeping their cap table up to date. When raising series A, the investor demanded an exact fully diluted cap table, revealing founder dilution far higher than they thought. The reconstruction delayed the operation and weakened their negotiating position. Thereafter, the cap table was kept rigorously and each operation simulated upstream, restoring control of the capital.
Frequently asked questions
What is a cap table?+
It is the capitalisation table of a company: the breakdown of capital between shareholders, plus all the instruments giving access to capital (employee warrants, investor warrants, convertibles). It describes who holds what, currently and potentially.
What is fully diluted capital?+
It is the breakdown of capital once all securities likely to be converted into shares are included: employee warrants, investor warrants, convertible bonds. It is the real view of power and value, beyond existing shares alone.
Why reason fully diluted?+
Because reasoning on existing shares alone overestimates the founders' stake. On conversion of the outstanding instruments, their holding dilutes. Any raise negotiation is conducted fully diluted.
What does a cap table contain?+
The shares per holder, the employee warrants granted to staff, the investor and SAFE warrants, the convertible bonds, and the fully diluted summary. Each instrument represents potential dilution.
Why keep it up to date?+
Because a neglected cap table becomes unreadable and wastes time during a raise, when the investor demands an exact snapshot. Consistency with the articles, the share register and the agreement is essential.
When does the cap table matter most?+
During a fundraising or a sale, when investors and buyers demand an exact fully diluted breakdown. A neglected cap table then weakens the founders' negotiating position.
Key takeaways#
- The cap table records the breakdown of capital, shares and instruments giving access to capital.
- It includes employee warrants, investor warrants, SAFE warrants and convertible bonds, sources of potential dilution.
- It is read fully diluted, which gives the real breakdown after conversion.
- Reasoning on existing shares alone overestimates the founders' stake.
- It must be kept up to date and consistent with the articles, the share register and the agreement.
- It is decisive in a raise or a sale: neglecting it is paid for dearly.
Article written by the Hayot Expertise firm, registered with the Order of Chartered Accountants of Ile-de-France. Updated for 2026. This article is for information purposes and does not replace an analysis of your own situation.
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
Regulated French accounting and audit firm based in Paris 8, built to support companies across France with a digital and decision-oriented approach.
Sources
Official and operational sources cited for this page.
This topic is part of our service Holding tax advice in France | IS, participation exemption
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