Cap Table for Startups: What Every Founder Should Know

When a startup begins its journey, founders often focus on the product, customers, or team. However, there’s a strategic element that, if not managed from the start, can shape the entire path to growth: the Cap Table, or capitalization table. At Boost, we’ve supported a variety of startups through their funding rounds and know that a poorly structured Cap Table can be one of the reasons why a fund decides not to invest.

What is a Cap Table?

In simple terms, a Cap Table is a document that shows who owns a company and what percentage of shares each person holds. This record can include founders, investors, advisors, and, when applicable, employees with equity stakes.

In addition to the Cap Table, there is the Pro Forma Cap Table, which projects how ownership will look in the future, taking into account convertible notes or SAFEs that have not yet been converted into shares but will be once a priced round occurs.

This level of detail is crucial, as many startups raise capital through instruments like SAFEs without fully understanding the real impact these will have on their ownership structure.

Why is it so important to have a healthy Cap Table from the start?

A healthy Cap Table not only reflects who owns what, but also sends key signals to investors about the startup.

Venture capital funds review the Cap Table to assess:

• The founders’ level of commitment. If a founder is highly diluted from the early stages, they may lose motivation in the long run.
  
  
• Future sustainability. Investors know there will be more rounds and more dilution. If the founding team already has little equity today, how much will remain after a Series A or B?
  
  
• The quality of past decisions. A messy Cap Table suggests limited experience in structuring or unbalanced negotiations.
  

What Does a Healthy Cap Table Look Like?

There’s no single formula, but there are recommended thresholds depending on the stage the startup is in. These ranges help investors assess whether founders still hold a meaningful stake that keeps them motivated in the long run:

• Before raising Pre-Seed: Ideally, co-founders should retain 100% of the equity.
  
  
• At the start of the Seed round: The founding team should hold between 70% and 80% ownership.
  
  
• Before a Series A: Founders should maintain at least 60%.
  
  
• Post-Series A: The expectation is for the founding team to retain at least 50% of the total.
  

These numbers aren’t hard rules, but they serve as reasonable benchmarks for investors to evaluate whether the founding team holds a significant enough stake to remain committed over time.

According to Carta’s Founder Ownership Report 2025, after raising a Seed round, founders keep an average of 56.2% ownership; this drops to 36.1% after a Series A, and to 23% after a Series B^[1]. This shows that most startups fall below what is considered a healthy cap table.

When these ranges are broken, what’s known as a broken cap table can emerge—an unbalanced ownership structure that limits the ability to attract investment and grow sustainably.

If you want to see clear examples of what a broken cap table looks like and the risks it poses, we invite you to watch our Managing Director’s full analysis in this video on our YouTube channel.

A Practical Example

Let’s imagine a startup founded by two people, each holding 50%. In a Pre-Seed round, they raise USD 200,000 with a SAFE at a post-money CAP of USD 1 million. In that scenario, the pro forma Cap Table would look like this:

• Cofounder A: 40%
  
  
• Cofounder B: 40%
  
  
• Pre-Seed Investor: 20%
  
  

If they later raise a Seed round of USD 1 million with a post-money CAP of USD 4 million, the pro forma Cap Table adjusts to:

• Cofounder A: 27.5%
  
  
• Cofounder B: 27.5%
  
  
• Pre-Seed Investor: 20%
  
  
• Seed Investor: 25%
  
  

Finally, at the Series A stage with an equity round (for example, USD 3 million at a pre-money valuation of USD 27 million), the percentages are permanently diluted, and the Cap Table stops being “pro forma” and becomes reality.

Considering that the post-money valuation of the Series A would be USD 30 million (USD 27 million pre-money + USD 3 million new capital), and assuming no new stock option pool is created in this round, the updated Cap Table would look approximately like this:

• Cofounder A: 18.7%
  
  
• Cofounder B: 18.7%
  
  
• Pre-Seed Investor: 13.6%
  
  
• Seed Investor: 17%
  
  
• Serie A Investor: 32%
  

This example illustrates why it’s essential to plan carefully from the start. Every round has an impact. Every SAFE, every equity concession, and every mistake in the initial structure can carry forward over time.

Before raising capital, look inward

 It’s easy to think that securing funding is the ultimate win. But the real victory is maintaining significant ownership and the motivation to build something bigger. A healthy Cap Table not only protects the founders’ interests — it also demonstrates vision, responsibility, and readiness to play in the big leagues.

And at the end of the day, that’s the signal any serious investor is looking for.

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^[1] Carta. (2025). Founder ownership report 2025 https://carta.com/uk/en/data/founder-ownership/