There are many reasons why every startup and each existing company should be keeping detailed records linked to their ownership and stock issuances. Whether the startup is headed by an experienced entrepreneur or an individual finding their feet in the business sector, it is vital to keep up with cap table management at all times. Most entrepreneurs have a basic understanding of cap tables, but few understand the advantages that can be had from this form of software.
Cap table management performs an important role
In its most basic form, the cap table is simply a spreadsheet detailing the investors who have a share in any company and their level of ownership. As new rounds of investment are undertaken by a startup, the entries on a cap table will change as levels of ownership will fall and rise with each investment. Without keeping an up to date cap table, the chances of finding new funding as a company grows and evolves are almost nil no matter how impressive the products and services offered may be.
Keeping track of stock
Perhaps the most important role played by cap table management is making sure each stock or share issued is tracked by the company to know exactly who is in control of how much of any business. Companies often offer employees the chance to purchase stock upon reaching certain times of employment or meeting job demands, but these often lapse and can leave a gap in ownership without the proper management of a cap table. To get daily updates follow our Twitter page.