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Plan","/template/architect-business-plan-D11928","https://templates.business-in-a-box.com/imgs/250px/11928.png",{"description":87,"descriptionCustom":6,"label":88,"pages":89,"size":8,"extension":41,"preview":90,"thumb":91,"svgFrame":92,"seoMetadata":93,"parents":95,"keywords":94,"url":101},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. Purchase for Investment","Shareholders Agreement","16","https://templates.business-in-a-box.com/imgs/1000px/shareholders-agreement-D1016.png","https://templates.business-in-a-box.com/imgs/250px/1016.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1016.xml",{"title":94,"description":6},"shareholders agreement",[96,98],{"label":31,"url":97},"business-legal-agreements",{"label":99,"url":100},"Incorporation Agreements","incorporation-agreement","/template/shareholders-agreement-D1016",{"description":103,"descriptionCustom":6,"label":104,"pages":105,"size":8,"extension":41,"preview":106,"thumb":107,"svgFrame":108,"seoMetadata":109,"parents":111,"keywords":110,"url":114},"STOCK OPTION PLAN This Stock Option Plan (the \"Plan\") is given by [COMPANY NAME] (the \"Company\"), having its registered office at [SPECIFY ADDRESS] to its Employees. This Plan was approved and adopted by the Board of Directors and by the stockholders on [DATE]. STATEMENT OF PURPOSE [COMPANY NAME] has formulated this Plan, in furtherance of the corporate policy of the Company, for creating an environment conducive to higher growth opportunities for its Employees and the Employees of its Affiliates, and with a view to align the interests of such Employees and those of the shareholders by creating a common sense of purpose towards creating sustainable shareholder value. DEFINITIONS Administrator shall mean the Compensation Committee of the Board (or a subcommittee thereof) acting in its capacity as Administrator of the Plan. Applicable Laws shall mean the legal requirements related to the Plan and the option under applicable provisions of the securities laws of [STATE/PROVINCE]. Board shall mean the Company's Board of Directors. Company shall mean [NAME OF COMPANY]. Option Shares shall mean the number of shares of Common Stock subject to the option as specified in the attached Exhibit A. Optionee shall mean the person eligible to avail the Stock Option Plan. Permanent Disability shall mean the inability of the Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or to be of continuous duration of [NUMBER OF MONTHS] months or more. Plan shall mean this Stock Option Plan. GRANT OF OPTION The Company hereby grants to the eligible person (the \"Optionee\") an option to purchase shares of Common Stock under the Plan. The date on which this option is granted (the \"Grant Date\"), the number of shares of Common Stock purchasable under this option (the \"Option Shares\"), the exercise price payable per share (the \"Exercise Price\"), the applicable vesting schedule by which this option shall vest and become exercisable incrementally for the Option Shares (the \"Vesting Schedule\") and the date to be used to measure the maximum term of this option (the \"Expiration Date\") are indicated on the attached Exhibit A to this Plan. The remaining terms and conditions governing this option shall be as set forth in this Plan. ELIGIBILITY FOR THE GRANT OF OPTIONS The criteria to be fulfilled by an Employee for being considered an Eligible Employee may be prescribed by the Committee from time to time. Only Employees fulfilling such criteria and who are not Disqualified Employees shall be considered Eligible Employees for the purposes of this Plan. An option can be granted only to an Eligible Employee who has been selected by the Committee. While selecting Eligible Employees for the award of grants and for deciding the number of options to be granted to such Eligible Employees, the Committee may be guided by the following considerations (i.e. eligibility criteria): Number of years of service Job profile and grade Performance rating or key result area appraisal Any other factors the Board of Directors or the Committee may deem appropriate. OPTION TERM The term of this option shall commence on the Grant Date and continue to be in effect until the close of business on the last business day prior to the Expiration Date specified in the attached Exhibit A, unless sooner terminated in accordance with this Plan. LIMITED TRANSFERABILITY This option shall be neither transferable nor assignable by the Optionee other than by will or the laws of inheritance following the Optionee's death and may be exercised, during the Optionee's lifetime, only by the Optionee. DATE OF EXERCISE This option shall vest and become exercisable for the Option Shares in a series of installments in accordance with the Vesting Schedule set forth in the attached Exhibit A. As the option vests and becomes exercisable for such installments, those installments shall accumulate, and the option shall remain exercisable for the accumulated installments until the last business day prior to the Expiration Date or any sooner termination of the option term. CESSATION OF SERVICE The option mentioned above shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable: Except as otherwise expressly provided in subparagraphs 8.1.2 through 8.1.7 of this Paragraph 8, should the Optionee cease to remain in Continuous Service for any reason while this option is outstanding, then the Optionee shall have until the close of business on the last business day prior to the expiration of the [NUMBER OF MONTHS]-month period measured from the date of such cessation of Continuous Service during which to exercise this option for any or all of the Option Shares for which this option is vested and exercisable at the time of the Optionee's cessation of Continuous Service, but in no event shall this option be exercisable at any time after the close of business on the last business day prior to the Expiration Date. In the event the Optionee ceases Continuous Service by reason of his or her death while this option is outstanding, then this option may be exercised, for any or all of the Option Shares for which this option is vested and exercisable at the time of the Optionee's cessation of Continuous Service, by (i) the personal representative of the Optionee's estate or (ii) the person or persons to whom the option is transferred pursuant to the Optionee's will or the laws of inheritance following the Optionee's death. However, if the Optionee dies while holding this option and has an effective beneficiary designation in effect for this option at the time of his or her death, then the designated beneficiary or beneficiaries shall have the exclusive right to exercise this option following the Optionee's death. Any such right to exercise this option shall lapse, and this option shall cease to be outstanding, upon the close of business on the last business day prior to the earlier of (a) the expiration of the twelve (12)-month period measured from the date of the Optionee's death or (b) the Expiration Date. Upon the expiration of such limited exercise period, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised. Should the Optionee cease Continuous Service by reason of Permanent Disability while this option is outstanding, then the Optionee shall have until the close of business on the last business day prior to the expiration of the twelve (12)-month period measured from the date of such cessation of Continuous Service during which to exercise this option for any or all of the Option Shares for which this option is vested and exercisable at the time of such cessation of Continuous Service. In no event, however, shall this option be exercisable at any time after the close of business on the last business day prior to the Expiration Date. Except as otherwise precluded by Applicable Laws, should (i) the Optionee cease Continuous Service after completion of at least three (3) years of Continuous Service and (ii) the sum of the Optionee's attained age and completed years of Continuous Service at the time of such cessation of service equals or exceeds seventy (70) years, then the Optionee shall have until the close of business on the last business day prior to the expiration of the thirty-six (36)-month period measured from the date of such cessation of Continuous Service during which to exercise this option for any or all of the Option Shares for which this option is vested and exercisable at the time of such cessation of Continuous Service. In no event, however, shall this option be exercisable at any time after the close of business on the last business day prior to the Expiration Date.","Stock Option Plan","9","https://templates.business-in-a-box.com/imgs/1000px/stock-option-plan-D13284.png","https://templates.business-in-a-box.com/imgs/250px/13284.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#13284.xml",{"title":110,"description":6},"stock option plan",[112,113],{"label":31,"url":97},{"label":31,"url":97},"/template/stock-option-plan-D13284",{"description":116,"descriptionCustom":6,"label":117,"pages":105,"size":8,"extension":41,"preview":118,"thumb":119,"svgFrame":120,"seoMetadata":121,"parents":123,"keywords":122,"url":129},"SUBSCRIPTION AGREEMENT This Stock Subscription Agreement (the \"Agreement\") is made and effective [DATE] BETWEEN: [INSERT COMPANY NAME], a [INSERT STATE OF INCORPORATION], corporation [the \"COMPANY\"]. AND: The undersigned a [INSERT STATE OF INCORPORATION], corporation [the \"INVESTOR\"]. SUBSCRIPTION. Subject to the terms and conditions hereof, the Investor hereby subscribes to purchase that number of shares of common stock, par value [$____] per share, of the Company (the \"Common Stock\") set forth on the signature page of this Agreement at a purchase price of $____ per share (\"Purchase Price\"). Payment for the Common Stock shall be made in cash or by certified bank or cashier's check payable in immediately available funds in the amount of the Purchase Price made payable to the order of the Company and such payment shall be delivered on or prior to the execution and delivery of this Agreement. TERMS OF SUBSCRIPTION The Investor acknowledges and agrees that this Agreement is made subject to the following terms and conditions: The Investor hereby intends that his signature hereon shall constitute a subscription to the Company for the number of shares of Common Stock specified on the signature page of this Agreement. This subscription for the purchase of Common Stock is subject to acceptance by the Company and does not, prior to acceptance, bind the Company to sell the shares of Common Stock to the Investor. The Company shall have the right to accept or reject this subscription, in whole or in part, in its sole and absolute discretion for any reason. This subscription is and shall be irrevocable unless and until (i) this subscription is for any reason rejected, or (ii) this Agreement is terminated. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF INVESTOR The Investor hereby represents, warrants, and covenants to the Company that: The Investor acknowledges that the Investor has been advised and understands that the Common Stock to be acquired pursuant to this Agreement have not been registered under the Securities Act of 1933, as amended (the \"Securities Act\"), or registered or qualified under the securities laws of any other jurisdiction and are being sold in reliance upon an exemption from registration under such laws. Accordingly, the Investor understands that the Investor may not sell, pledge, hypothecate, dispose of, or otherwise transfer (a \"Transfer\") the Common Stock unless such shares are subsequently registered and qualified under such laws or, in the opinion of counsel reasonably satisfactory to the Company, an exemption from such registration and qualification is available. The Investor further understands that (i) the Stockholders' Agreement, dated ____, 20___, by and among the Company and the shareholders identified therein (the \"Stockholders s Agreement\") contains certain restrictions on any Transfer of the Common Stock, and (ii) any Transfer that is permitted under the Stockholders Agreement must satisfy certain legal, procedural and other requirements. The Investor is the sole and true party in interest, and is acquiring the Common Stock solely for his or her own account, not as a nominee, agent, or representative for any person, for investment purposes only, and not with an intent or a view to the sale or distribution of any part thereof within the meaning of Section 2(a)(11) of the Securities Act. By executing this Agreement, the Investor further represents that he or she does not have any present intent of making a Transfer of, granting a participation in, or otherwise distributing the Common Stock in a manner contrary to the Securities Act or the securities laws of any other applicable jurisdictions, nor does the Investor have any contract, undertaking, agreement, or arrangement with any person to Transfer, grant any participation in, or otherwise distribute any of the Common Stock to such person. The Investor does not presently have any reason to anticipate any change in circumstances or other particular occasion or event which would cause the Investor to need to sell the Common Stock, except in compliance with the terms of this Agreement, the Stockholders Agreement, and the securities laws of all applicable jurisdictions. The Investor understands and acknowledges that only the Company can register the Common Stock under applicable securities laws; the Company does not intend to register the Common Stock under the Securities Act or the securities laws of any other jurisdiction; no public market for the Common Stock is expected to develop; and, as a result, an investment in the Common Stock may not be liquid and the Investor must bear the economic risk of the investment indefinitely. In this regard, the Investor further represents that the Investor has adequate means of providing for the Investor's current needs and possible personal contingencies; the Investor can afford to bear the economic risk of holding the Common Stock for an indefinite period of time; and the Investor has no need for liquidity in the Investor's investment in the Common Stock. The Investor has the net worth sufficient to bear the risks of and to sustain a complete loss of the Investor's entire investment in the Company. The Investor hereby agrees that it will not, directly or indirectly, offer to Transfer or to Transfer any shares of Common Stock (or solicit any offers to buy, purchase, or otherwise acquire or take a pledge of any shares of Common Stock), except in compliance with this Agreement and the Securities Act, the securities laws of all other applicable jurisdictions, and the rules and regulations promulgated thereunder. The Investor recognizes that in the future the Company may not satisfy the requirements which would permit the undersigned to sell the Common Stock pursuant to Rule 144 promulgated under the Securities Act. The Investor further acknowledges that it has, alone or together with its purchaser representative (\"Purchaser Representative\"), sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of the prospective investment in the Common Stock. The Investor recognizes that an investment in the Common Stock and in the Company involves certain risks, and the Investor has taken full cognizance of, understands, and is willing to bear the risks related to the purchase of the Common Stock [including, without limitation, those risk factors set forth in Attachment A to this Agreement, which Attachment A is incorporated herein by reference]. The Investor is aware and understands that no federal or state agency has made any finding or determination as to the fairness of this offering nor has made any recommendation or endorsement of the Common Stock. The Investor represents and confirms that the address set forth on the signature page is the Investor's true and correct residence, and that the Investor has no present intention of becoming a resident of any other state or jurisdiction. The social security number set forth on the signature page hereof is the Investor's true and correct social security number. The Investor confirms that prior to the sale of the Common Stock to the Investor pursuant to this Agreement, the Investor and the Investor's Purchaser Representative, if any: (i) has been given access to all material books and records of the Company and all material contracts and documents relating to the sale of the Common Stock pursuant to this Agreement; (ii) has been granted the opportunity to ask questions of, and receive answers from, representatives of the Company concerning the Company and the terms and conditions of the sale of the Common Stock by the Company; and (iii) has been given the opportunity to obtain any additional information which the Investor or the Investor's Purchaser Representative, if any, deems necessary to verify the accuracy of the information supplied to them","Subscription Agreement","https://templates.business-in-a-box.com/imgs/1000px/subscription-agreement-D12537.png","https://templates.business-in-a-box.com/imgs/250px/12537.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12537.xml",{"title":122,"description":6},"subscription agreement",[124,126],{"label":17,"url":125},"finance-accounting",{"label":127,"url":128},"Buy & Sell Shares","buy-sell-shares","/template/subscription-agreement-D12537",{"description":131,"descriptionCustom":6,"label":132,"pages":7,"size":133,"extension":41,"preview":134,"thumb":135,"svgFrame":136,"seoMetadata":137,"parents":138,"keywords":143,"url":144},"TERM SHEET Issue: [Venture Capital FIRM] (\"VC\") and/or any member of its corporate group (\"the VC Group\") will purchase up to [AMOUNT] Series A Convertible Preferred Stock (\"Series A\") newly issued by [YOUR COMPANY NAME] (the \"Company\") at a price per share of [PRICE] (the \"Purchase Price\"). In addition, other investors shall purchase at least [AMOUNT] but not more than [AMOUNT] of newly issued Series A at the Purchase Price. The shares of Series A will be convertible at any time at the option of the holder into common shares of the Company (\"Common Stock\") on a one-for-one basis, adjusted for future share splits. The Purchase Price equates to a pre-money valuation of [VALUATION]. The calculation is based on [NUMBER] fully diluted shares of Common Stock. If the number of shares issued, or stock awards/options authorized increases before the closing the price per share for Series A Convertible Preferred Stock shall be reduced so that the pre-money valuation is unchanged. The Series A Convertible Preferred Stock shall be referred to herein as the \"Preferred Stock.\" Dividend: The Preferred Stock is entitled to an annual [AMOUNT] per share dividend, payable when and if declared by the Board of Directors, but prior to any payment on Common Stock; dividends are not cumulative. Liquidation Preference: The Series A will have a liquidation preference so that proceeds on a merger, sale or liquidation (including non-cumulative dividends) will first be paid to the Series A and will include a [%] per annum compounding guaranteed return calculated on the total amount invested. Upon completion of an additional round of funding of at least [AMOUNT] the compounding guaranteed return feature will expire. The liquidation preference will cease to operate if the proceeds due to Series A, on a merger, sale or liquidation on an as-converted basis, exceed the proceeds that would be due under the liquidation preference. Use of Proceeds: The funds raised by Series A will be used principally for general working capital purposes. Voting Rights: The holders of the Series A shall have the right to vote with the Common Stock on an as-if-converted basis. Redemption: If not previously converted, the Series A is to be redeemed in three equal successive annual installments beginning [DATE]. Redemption will be at the purchase price plus a [%] per annum cumulative guaranteed return. Pre-emptive Rights: Holders of the Preferred Stock will be granted rights to participate in future equity financings of the Company based upon their pro-rata, as-if-converted, ownership of the Company. Automatic Conversion: The Preferred Stock shall be automatically converted into Common Stock at the then applicable conversion rate (1:1 assuming no share splits) in the event of an underwritten public offering of shares of the Company at a total offering of not less than [AMOUNT] and at a per share public offering price of not less than three times the Series A purchase price per share, adjusted for splits. Anti-Dilution: Series A shall have weighted average anti-dilution, based on a weighted average formula to be agreed, for all securities purchased as part of this transaction (excluding shares, options and warrants issued for management incentive and small issues for strategic purposes of under [NUMBER] shares). Management Options: Simultaneously with this transaction, one million new shares shall expand the Company's management incentive stock option pool - bringing the total number of shares issued and stock incentives (awards and options) authorized to [NUMBER OF SHARES]. Rights of First Offer; Tag-Along: The Company and the Investors will have a right of first refusal with respect to any employee's shares proposed to be resold. Alternatively, the Investors will have the right to participate in the sale of any such shares to a third party (co-sale rights), which rights will terminate upon a public offering. Information Rights: Monthly actual vs. plan and prior year. Annual budget [NUMBER] days before beginning of fiscal year","Term Sheet",42,"https://templates.business-in-a-box.com/imgs/1000px/term-sheet-D473.png","https://templates.business-in-a-box.com/imgs/250px/473.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#473.xml",{"title":6,"description":6},[139,140],{"label":17,"url":125},{"label":141,"url":142},"Raising Capital","raising-capital","term sheet","/template/term-sheet-D473",{"description":146,"descriptionCustom":6,"label":147,"pages":7,"size":8,"extension":41,"preview":148,"thumb":149,"svgFrame":150,"seoMetadata":151,"parents":153,"keywords":152,"url":158},"INVESTMENT AGREEMENT This Investment Agreement (the Agreement) is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] a Company (the \"COMPANY\") organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR NAME] the principal members of the Company (the \"Company Principals\") collectively referred to in this Agreement as the \"Company Parties.\" and existing under the laws of [STATE/PROVINCE], located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] a Company (the \"COMPANY\") organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Company was formed for the purpose of further developing, commercializing, and operating the business concept identified and includes any subsequent iteration of the business concept developed by the Company Parties (the \"Business\"); WHEREAS the Investor is desirous of making an investment (the \"Investment\") in the amount of [TOTAL INVESTMENT AMOUNT] into the Company to facilitate such Business. NOW THEREFORE, in consideration of the mutual covenants and agreements herein contains, the parties hereto intending to be legally bound agree as follows: THE INVESTMENT 1.1 The Investor will make the Investment in the Company in consideration for the rights and privileges set forth in this Agreement. FUTURE ISSUANCES OF SECURITIES 2.1 From and after the date of this Agreement, the parties agree to take such further action and to execute, acknowledge and deliver all such further documents as are reasonably requested by the other party for carrying out the purposes of this Agreement. 2.2 If at any time in the future, the Company proposes to sell and issue any debt or equity securities, or any other securities or instruments entitling the holder thereof to receive any profits, capital, assets or property of the Company (collectively, \"Securities\"), in a single transaction or series of related transactions that results in gross proceeds to the Company of at least [STATE AMOUNT] (a \"Qualified Financing\"), the Company shall deliver written notice to the Investor stating (i) its bona fide intention to offer such Securities, (ii) the amount and type of Securities to be offered and (iii) the price and terms upon which it proposes to offer such securities. Upon receipt of such notice, the Investor shall be entitled to exercise any of the rights specified in sections 3, 4 and 5. RIGHT OF FIRST OFFER 3.1 The Investor shall have the first right to purchase all the Securities to be offered and sold in such Qualified Financing at the price and on the same terms and conditions specified in the notice. RIGHT TO PARTICIPATE 4","Investment Agreement","https://templates.business-in-a-box.com/imgs/1000px/investment-agreement-D12831.png","https://templates.business-in-a-box.com/imgs/250px/12831.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12831.xml",{"title":152,"description":6},"investment agreement",[154,155],{"label":17,"url":125},{"label":156,"url":157},"Shareholders & Investors","shareholders-investors","/template/investment-agreement-D12831",{"description":160,"descriptionCustom":6,"label":161,"pages":162,"size":163,"extension":41,"preview":164,"thumb":165,"svgFrame":166,"seoMetadata":167,"parents":168,"keywords":178,"url":179},"MEETING MINUTES [YOUR COMPANY NAME] Opening: The regular meeting of [YOUR COMPANY Name] duly called and held on [Date] at [Address], commencing at [Time]. Present were: [List of attendeeS] With the approval of the directors present, [Chairman name] acted as Chairman of the meeting and [Secretary name] recorded the minutes. Approval of Agenda The agenda was unanimously approved as distributed. Approval of Minutes The minutes of the previous meeting were unanimously approved as distributed. Announcements","Minutes for a Formal Meeting","1",30,"https://templates.business-in-a-box.com/imgs/1000px/minutes-for-a-formal-meeting-D13.png","https://templates.business-in-a-box.com/imgs/250px/13.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#13.xml",{"title":6,"description":6},[169,172,175],{"label":170,"url":171},"Business Plan Kit","business-plan-kit",{"label":173,"url":174},"Board of Directors","board-of-directors",{"label":176,"url":177},"Meeting Minutes","meeting-minutes","minutes for a formal meeting","/template/minutes-for-a-formal-meeting-D13",false,{"seo":182,"reviewer":195,"legal_disclaimer":199,"quick_facts":200,"at_a_glance":202,"personas":206,"variants":231,"glossary":255,"clauses":292,"how_to_fill":343,"common_mistakes":384,"faqs":409,"industries":440,"comparisons":457,"diy_vs_lawyer":471,"jurisdictions":484,"related_template_ids_curated":505,"schema":518,"classification":519},{"meta_title":183,"meta_description":184,"primary_keyword":185,"secondary_keywords":186},"Cap Table Template — Free Word Download | Business in a Box","Free cap table template for tracking equity ownership, share classes, and dilution. Download in Word, edit online, or export as PDF.","cap table template",[187,188,189,190,191,192,193,194],"capitalization table template","cap table template word","startup cap table template","equity ownership table","cap table template free","share cap table template","cap table example","capitalization table example",{"name":196,"credential":197,"reviewed_date":198},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":201,"legal_review_recommended":199,"signature_required":199,"notarization_required":180},"advanced",{"what_it_is":203,"when_you_need_it":204,"whats_inside":205},"A Cap Table (Capitalization Table) is a legal document that records every equity owner in a company — founders, investors, and option holders — along with the type of security each holds, the number of shares or units, and the resulting ownership percentage on both a basic and fully diluted basis. This free Word download gives you a structured starting point you can edit online and export as PDF to share with investors, lawyers, and board members.\n","Use it when incorporating a new company and issuing founder shares, when closing a seed or Series A round that brings in external investors, or any time the company grants stock options, issues convertible notes, or contemplates a new share class. Investors and acquirers will request an up-to-date cap table before any due diligence conversation.\n","Shareholder names and entity types, security classes (common stock, preferred stock, options, warrants, convertible notes), share counts and issue prices, ownership percentages on a basic and fully diluted basis, and a waterfall summary showing proceeds distribution on exit.\n",[207,211,215,219,223,227],{"title":208,"use_case":209,"icon_asset_id":210},"Startup founders","Recording initial equity splits before the first external investment round","persona-startup-founder",{"title":212,"use_case":213,"icon_asset_id":214},"Angel investors","Confirming ownership percentage and anti-dilution rights before wiring funds","persona-investor",{"title":216,"use_case":217,"icon_asset_id":218},"Venture capital associates","Modeling post-money dilution and pro-rata rights across multiple share classes","persona-vc-associate",{"title":220,"use_case":221,"icon_asset_id":222},"Corporate attorneys","Maintaining an authoritative equity record that matches the company's share register","persona-attorney",{"title":224,"use_case":225,"icon_asset_id":226},"CFOs and finance directors","Tracking option pool usage and computing diluted EPS for financial statements","persona-cfo",{"title":228,"use_case":229,"icon_asset_id":230},"M&A advisors","Running a transaction waterfall to model per-share proceeds at various exit valuations","persona-ma-advisor",[232,236,239,242,245,248,251],{"situation":233,"recommended_template":234,"slug":235},"Newly incorporated company issuing only founder common shares","Simple Founder Cap Table","cap-table-D13151",{"situation":237,"recommended_template":238,"slug":235},"Seed round with convertible notes or SAFEs alongside founder equity","Seed-Stage Cap Table with Convertible Instruments",{"situation":240,"recommended_template":241,"slug":235},"Series A or later with preferred stock and multiple investor classes","Preferred Stock Cap Table",{"situation":243,"recommended_template":244,"slug":235},"Company with an employee stock option plan (ESOP) already in place","Cap Table with Option Pool Schedule",{"situation":246,"recommended_template":247,"slug":235},"Modeling a proposed funding round to show pre- and post-money ownership","Cap Table with Round Modeling",{"situation":249,"recommended_template":250,"slug":235},"Pre-exit modeling showing distribution of sale proceeds by share class","Cap Table with Waterfall Analysis",{"situation":252,"recommended_template":253,"slug":254},"Tracking equity grants in a limited liability company (LLC) or partnership","LLC Membership Interest Table","llc-membership-interest-purchase-agreement-D5208",[256,259,262,265,268,271,274,277,280,283,286,289],{"term":257,"definition":258},"Capitalization Table","A record of all equity ownership in a company, showing each holder's security type, share count, and percentage ownership.",{"term":260,"definition":261},"Fully Diluted Shares","The total share count including all issued shares plus all securities that could convert to shares — options, warrants, convertible notes, and SAFEs.",{"term":263,"definition":264},"Pre-Money Valuation","The agreed value of the company before a new investment round is added, used to calculate the price per share for incoming investors.",{"term":266,"definition":267},"Post-Money Valuation","The company's value immediately after a new investment is closed — calculated as pre-money valuation plus the new capital invested.",{"term":269,"definition":270},"Option Pool","A block of shares reserved for future grants to employees, advisors, and consultants, typically sized at 10–20% of fully diluted shares before a financing round.",{"term":272,"definition":273},"SAFE (Simple Agreement for Future Equity)","A convertible instrument that grants the right to receive equity in a future priced round, typically at a discount or valuation cap, without accruing interest.",{"term":275,"definition":276},"Anti-Dilution Provision","A right granted to preferred shareholders that adjusts their conversion price downward if the company later issues shares at a lower price, protecting against value loss.",{"term":278,"definition":279},"Liquidation Preference","A right that entitles preferred shareholders to receive a specified multiple of their investment before common shareholders receive any proceeds on exit.",{"term":281,"definition":282},"Pro-Rata Rights","A contractual right allowing existing investors to participate in future funding rounds to maintain their ownership percentage.",{"term":284,"definition":285},"Vesting Schedule","A timeline — typically 4 years with a 1-year cliff — over which a founder or employee earns the right to their equity grant.",{"term":287,"definition":288},"409A Valuation","An independent appraisal of a private company's common stock fair market value, required by US tax law to set legally compliant option strike prices.",{"term":290,"definition":291},"Waterfall Analysis","A model showing how exit proceeds are distributed among shareholders in priority order — liquidation preferences first, then participation rights, then common shares.",[293,298,303,308,313,318,323,328,333,338],{"name":294,"plain_english":295,"sample_language":296,"common_mistake":297},"Shareholder Identification","Lists every equity holder by full legal name or entity name, their role (founder, investor, employee), and their contact or registration details.","[SHAREHOLDER FULL NAME / ENTITY NAME], [ROLE — e.g., Founder / Series A Investor / Option Holder], [ADDRESS / JURISDICTION OF INCORPORATION].","Listing a founder's personal name when shares are held through a holding company — the cap table must match the share register exactly, or transfer restrictions and tax elections may be invalidated.",{"name":299,"plain_english":300,"sample_language":301,"common_mistake":302},"Security Class and Type","Identifies the class of security each holder owns — common stock, Series A preferred, options, warrants, SAFEs, or convertible notes — and the rights attached to each class.","[SECURITY TYPE — e.g., Series A Preferred Stock] carrying [LIQUIDATION PREFERENCE MULTIPLE]x non-participating liquidation preference, convertible to common at [CONVERSION RATIO].","Lumping all preferred shares into one class without noting sub-series. Series A and Series B preferred often carry different liquidation preferences — treating them identically produces a wrong waterfall.",{"name":304,"plain_english":305,"sample_language":306,"common_mistake":307},"Authorized and Issued Share Counts","Records the total shares authorized by the company's articles, the shares actually issued to date, and the shares reserved but unissued (option pool, warrants).","Authorized shares: [X,XXX,XXX]. Issued and outstanding: [X,XXX,XXX]. Reserved for option pool: [XXX,XXX]. Reserved for warrants: [XXX,XXX]. Remaining authorized but unissued: [XXX,XXX].","Forgetting to include the unissued option pool in the fully diluted share count. This understates dilution for founders and existing shareholders and produces an inflated ownership percentage.",{"name":309,"plain_english":310,"sample_language":311,"common_mistake":312},"Issue Price and Purchase Date","Records the price per share paid by each investor and the date of issuance, establishing the cost basis used for capital gains calculations and preference waterfall modeling.","[SHAREHOLDER NAME] purchased [X,XXX] shares of [SECURITY CLASS] at $[PRICE] per share on [DATE], for aggregate consideration of $[TOTAL].","Omitting the issue date for founder shares. The date triggers the start of capital gains holding periods and determines whether a Section 83(b) election is still available in the US.",{"name":314,"plain_english":315,"sample_language":316,"common_mistake":317},"Ownership Percentage — Basic and Fully Diluted","Calculates each holder's percentage on two bases: basic (issued shares only) and fully diluted (all shares including options, warrants, and convertibles).","[SHAREHOLDER NAME]: [X,XXX] shares. Basic ownership: [XX.X]% ([X,XXX] ÷ [TOTAL ISSUED]). Fully diluted ownership: [XX.X]% ([X,XXX] ÷ [TOTAL FULLY DILUTED]).","Presenting only basic ownership to investors. Preferred investors always evaluate on a fully diluted basis — showing only basic percentages looks either naive or intentionally misleading.",{"name":319,"plain_english":320,"sample_language":321,"common_mistake":322},"Vesting Schedule and Cliff","Specifies the vesting timeline for each founder or employee grant — total duration, cliff date, and monthly vesting cadence — along with any acceleration triggers.","[GRANTEE NAME]'s [X,XXX] shares vest over [48] months with a [12]-month cliff commencing [START DATE]. [X]% accelerates on a Change of Control.","Not recording vesting details in the cap table at all and relying only on a separate grant agreement. If the grant agreement is lost, the cap table has no basis for a vesting dispute.",{"name":324,"plain_english":325,"sample_language":326,"common_mistake":327},"Convertible Instruments — Terms and Conversion Mechanics","Documents all outstanding SAFEs, convertible notes, and warrants, including principal, interest rate (if any), valuation cap, discount rate, and the trigger event for conversion.","[INVESTOR NAME] holds a SAFE with a $[X,XXX,XXX] valuation cap and [20]% discount, converting upon a Qualified Financing of at least $[X,XXX,XXX], issued [DATE].","Treating convertible notes as debt on the balance sheet and omitting them from the cap table. Until they convert, they are potential equity — excluding them makes the fully diluted count materially wrong.",{"name":329,"plain_english":330,"sample_language":331,"common_mistake":332},"Option Pool Detail","Lists each individual option grant — grantee, grant date, exercise price, number of options, vesting schedule, and status (outstanding, exercised, or forfeited).","[EMPLOYEE NAME] | Grant Date: [DATE] | Options: [X,XXX] | Exercise Price: $[PRICE] (409A as of [DATE]) | Vested: [X,XXX] | Unvested: [X,XXX] | Status: Outstanding.","Using a stale 409A valuation as the exercise price for new grants after a material funding round. This creates a tax compliance risk under IRC Section 409A — new grants after a material event require a refreshed appraisal.",{"name":334,"plain_english":335,"sample_language":336,"common_mistake":337},"Liquidation Preference Waterfall","Models the order and amount each share class receives upon a liquidity event — acquisition, IPO, or dissolution — at multiple hypothetical exit valuations.","At exit valuation of $[X,XXX,XXX]: (1) Series A preferred receives $[X,XXX,XXX] ([X]x preference). (2) Remaining proceeds of $[X,XXX,XXX] distributed pro rata to common shareholders.","Running the waterfall using fully diluted share counts for the common distribution before checking whether preferred holders have elected to participate. Participating preferred draws twice from the same exit pool.",{"name":339,"plain_english":340,"sample_language":341,"common_mistake":342},"Governing Terms and Cross-References","States the governing documents that control each security class — shareholder agreement, subscription agreement, option plan rules — and cross-references them to the cap table entry.","Series A Preferred rights are governed by the Series A Preferred Share Terms dated [DATE]. Employee options are governed by the [COMPANY NAME] Stock Option Plan dated [DATE], as amended.","Updating the cap table after a new financing without also updating the cross-referenced governing documents — or vice versa. Inconsistencies between the cap table and underlying agreements create disputes during due diligence.",[344,349,354,359,364,369,374,379],{"step":345,"title":346,"description":347,"tip":348},1,"Enter the company's authorized share structure","Record the total authorized shares by class as set out in the company's articles of incorporation or certificate of incorporation. Include all authorized classes — common, preferred, and any special classes — even if some are unissued.","Cross-check the authorized share counts against the most recently filed corporate articles before entering them — verbal representations from founders are often incorrect.",{"step":350,"title":351,"description":352,"tip":353},2,"List every shareholder and their security type","Enter each holder's full legal name exactly as it appears in the share register. Identify the security class, the number of shares or units held, and the date of issuance. Include founders, investors, advisors, and option holders.","Use the share register — not the subscription agreement or term sheet — as the authoritative source. The cap table must match the register entry for entry.",{"step":355,"title":356,"description":357,"tip":358},3,"Record all convertible instruments","Add a separate section for outstanding SAFEs, convertible notes, and warrants. Record principal (or amount), valuation cap, discount rate, maturity date, and the conversion trigger for each instrument.","If two SAFEs have different valuation caps or discount rates, list them as separate line items — blending them produces an incorrect conversion price.",{"step":360,"title":361,"description":362,"tip":363},4,"Build the option pool schedule","List each option grant individually — grantee, grant date, 409A-based exercise price, total options granted, number vested, number unvested, and status. Sum the outstanding options to confirm they do not exceed the reserved pool.","Flag any grants with exercise prices set before the most recent 409A valuation. New grants after a material event may require a refreshed appraisal to avoid IRS Section 409A penalties.",{"step":365,"title":366,"description":367,"tip":368},5,"Calculate basic and fully diluted ownership","Compute basic ownership as each holder's issued shares divided by total issued and outstanding shares. Compute fully diluted ownership by dividing each holder's share count by the sum of all issued shares plus all in-the-money options, warrants, and converted instruments.","Run a separate column for post-conversion SAFEs and notes at their applicable caps and discounts — the fully diluted count shifts materially depending on the assumed conversion price.",{"step":370,"title":371,"description":372,"tip":373},6,"Model the liquidation preference waterfall","For each hypothetical exit value — at least three: a downside, base case, and upside — calculate total proceeds available, then apply liquidation preferences in priority order before distributing residual proceeds to common shareholders.","Test the waterfall at an exit value equal to exactly 1x the most senior preference. This is the scenario where founders and common holders receive zero — knowing this breakeven matters for option pricing and negotiation.",{"step":375,"title":376,"description":377,"tip":378},7,"Cross-reference governing documents","For each security class, record the name and date of the governing document — shareholder agreement, option plan, subscription agreement — so any reader can trace the source of each right or restriction.","Use a consistent naming convention tied to the document version date, not a generic label like 'Option Plan' — there may be multiple amended versions.",{"step":380,"title":381,"description":382,"tip":383},8,"Have counsel review before sharing with investors","Before sending the cap table to prospective investors or in a due diligence data room, have a corporate attorney or qualified advisor confirm that all entries match the share register and that the governing documents are consistent with the table.","A two-hour legal review of a cap table typically costs $400–$800 and is far less expensive than correcting a capitalization error discovered mid-term-sheet.",[385,389,393,397,401,405],{"mistake":386,"why_it_matters":387,"fix":388},"Omitting convertible instruments from fully diluted share count","Outstanding SAFEs, convertible notes, and warrants represent future equity. Excluding them overstates every existing holder's ownership percentage and blindsides investors modeling their actual dilution.","Add a dedicated convertible instruments section and include the as-converted share count in every fully diluted ownership calculation, using the applicable valuation cap or conversion price.",{"mistake":390,"why_it_matters":391,"fix":392},"Using an outdated 409A valuation for new option grants","Granting options below fair market value triggers ordinary income tax — not capital gains tax — for employees at exercise under IRC Section 409A, plus a 20% penalty tax and interest on top.","Commission a new 409A appraisal before granting options after any material event — a priced round, significant revenue milestone, or acquisition offer — even if the last appraisal is less than 12 months old.",{"mistake":394,"why_it_matters":395,"fix":396},"Failing to match the cap table to the share register","Any discrepancy between the cap table and the official share register — which is the legal record of ownership — can delay or kill a financing round or acquisition when discovered in due diligence.","Reconcile the cap table against the share register at least quarterly and immediately after every new issuance, transfer, or cancellation of securities.",{"mistake":398,"why_it_matters":399,"fix":400},"Showing only basic ownership percentages to investors","Investors always evaluate ownership on a fully diluted basis. A cap table showing only basic percentages obscures the real impact of the option pool and convertible instruments and damages credibility.","Present both basic and fully diluted ownership columns as standard. If sharing with prospective investors, lead with fully diluted figures and footnote the assumptions behind the conversion calculations.",{"mistake":402,"why_it_matters":403,"fix":404},"Mixing holding company and personal name for the same founder","If shares are issued to a personal holding company but the cap table lists the founder's name, the share register and cap table conflict — creating a title defect that requires legal correction before any transaction closes.","Confirm the legal entity that actually holds the shares before issuing them, and record that exact entity name — not a nickname or the founder's personal name — on both the cap table and the share register.",{"mistake":406,"why_it_matters":407,"fix":408},"No vesting detail recorded in the cap table","Without vesting records in the cap table, a dispute over how many shares a departing founder or employee has earned cannot be resolved without external evidence — and that evidence is often incomplete or contradictory.","Add a vesting schedule column for every founder and employee equity grant, recording the start date, cliff, total duration, and number of shares vested and unvested as of the cap table date.",[410,413,416,419,422,425,428,431,434,437],{"question":411,"answer":412},"What is a cap table?","A cap table, short for capitalization table, is a legal document that records the equity ownership structure of a company. It lists every shareholder and security holder — founders, investors, employees with options, and holders of convertible instruments — along with the type of security they hold, the number of shares or units, and the resulting ownership percentage on both a basic and fully diluted basis. It is the authoritative reference for who owns what in a private company.\n",{"question":414,"answer":415},"Who needs a cap table?","Any company that has issued equity to more than one person needs a cap table. In practice, every incorporated startup should create one on day one when founder shares are issued. Investors, lenders, acquirers, and tax authorities all request a current cap table as part of standard due diligence. Companies that delay building one often discover capitalization errors — misallocated shares, missing option grants, unrecorded convertible notes — that require expensive legal correction before a deal can close.\n",{"question":417,"answer":418},"What is the difference between basic and fully diluted ownership?","Basic ownership is calculated using only the shares currently issued and outstanding. Fully diluted ownership adds all securities that could convert into shares in the future — stock options (vested and unvested), warrants, SAFEs, and convertible notes — to the denominator. Investors always evaluate ownership on a fully diluted basis because that is what their stake will look like after all conversion events occur. A founder who shows only basic ownership percentages will appear uninformed to sophisticated investors.\n",{"question":420,"answer":421},"When should I update my cap table?","Update the cap table immediately after every equity event: issuing new shares, closing a funding round, granting or canceling options, converting a SAFE or note, processing a transfer, or completing a stock split. At minimum, reconcile the cap table against the share register quarterly. An out-of-date cap table discovered in due diligence is one of the most common causes of deal delays and price reductions in acquisitions and venture financings.\n",{"question":423,"answer":424},"What is an option pool and how does it affect the cap table?","An option pool is a block of shares reserved in the cap table for future grants to employees, advisors, and consultants. It is typically sized at 10–20% of fully diluted shares, and investors often require it to be created — and included in the pre-money share count — before closing a financing round. Including the option pool in the pre-money denominator dilutes the founders' percentage before the investor's money even arrives, which is why option pool sizing is a heavily negotiated term in term sheets.\n",{"question":426,"answer":427},"How does a SAFE appear on a cap table?","A SAFE (Simple Agreement for Future Equity) is recorded on the cap table as a convertible instrument with its principal amount, valuation cap, discount rate, and issuance date. Until it converts, it does not yet represent issued shares — but it must be included in the fully diluted share count modeled at its conversion price. When a qualified financing triggers conversion, the SAFE is replaced with the actual number of preferred shares issued at the converted price.\n",{"question":429,"answer":430},"Do I need a lawyer to create or maintain a cap table?","A template is sufficient for a simple two-founder company with no external investors or options. Legal review is strongly recommended — and in practice essential — before closing any financing round, granting options above a nominal amount, or entering due diligence for a sale or merger. Corporate attorneys typically charge $400–$800 to review and reconcile a cap table against the underlying share register and governing documents, which is far less expensive than correcting a capitalization defect discovered mid-transaction.\n",{"question":432,"answer":433},"What is a liquidation waterfall and why does it matter?","A liquidation waterfall is a model — often built into the cap table — that shows how exit proceeds are distributed among shareholders in priority order at various hypothetical exit valuations. Preferred shareholders with liquidation preferences receive their multiple first, then participating preferred holders draw again from residual proceeds, and common shareholders receive whatever remains. The waterfall matters because it determines whether founders and employees receive meaningful proceeds from a sale, and it is a primary driver of investor and founder negotiation over preference terms.\n",{"question":435,"answer":436},"What is a 409A valuation and why does it affect the cap table?","A 409A valuation is an independent appraisal of a private company's common stock fair market value, required by US tax law before stock options can be granted at a compliant strike price. If options are granted below fair market value, employees face ordinary income tax plus a 20% penalty at exercise under IRC Section 409A. The cap table must reflect the 409A-derived exercise price for each option grant, and a fresh appraisal is required after any material event — a new funding round, a significant revenue milestone, or an acquisition offer.\n",{"question":438,"answer":439},"How does a new funding round change the cap table?","A new funding round adds a new security class (e.g., Series A Preferred), new shareholder rows for incoming investors, and often triggers conversion of outstanding SAFEs and convertible notes into shares. The pre-money share count — including any new option pool created at the investor's request — establishes the price per share, and post-money ownership percentages are recalculated for every existing holder. Founders routinely lose 15–30% of their basic ownership percentage in a typical seed-to-Series-A transition when option pool and investor shares are added.\n",[441,445,449,453],{"industry":442,"icon_asset_id":443,"specifics":444},"Technology / SaaS","industry-saas","Multiple preferred share series from sequential financing rounds, large option pools to attract engineers, and SAFE instruments from pre-seed angels all make SaaS cap tables among the most complex to maintain accurately.",{"industry":446,"icon_asset_id":447,"specifics":448},"Biotech / Life Sciences","industry-healthtech","Long development timelines mean multiple funding rounds with heavy liquidation preferences; milestone-based warrants tied to regulatory approvals add conditional equity that must be tracked and modeled separately.",{"industry":450,"icon_asset_id":451,"specifics":452},"Financial Services / Fintech","industry-fintech","Regulatory change-of-control approval requirements mean that any cap table transfer or new investor above a threshold ownership percentage triggers a licensing review, making accurate ownership records a compliance requirement.",{"industry":454,"icon_asset_id":455,"specifics":456},"Real Estate and Property","industry-real-estate","LLC and LP structures common in real estate use membership interest tables rather than share counts, with profits interest grants replacing options — requiring a variant of the standard cap table format.",[458,462,465,468],{"vs":459,"vs_template_id":460,"summary":461},"Shareholder Agreement","shareholders-agreement-D266","A shareholder agreement governs the rights and obligations between shareholders — voting, drag-along, tag-along, and transfer restrictions. A cap table records who holds what equity and in what quantity. The two documents must be consistent: the cap table shows the structure; the shareholder agreement controls the rules that apply to it. Both are required; neither substitutes for the other.",{"vs":104,"vs_template_id":463,"summary":464},"stock-option-plan-D13253","A stock option plan is the legal framework and rules governing how options are granted, exercised, and forfeited. The cap table records each individual option grant made under that plan — grantee, quantity, exercise price, vesting schedule, and status. The plan creates the authority; the cap table tracks the execution of that authority grant by grant.",{"vs":117,"vs_template_id":466,"summary":467},"subscription-agreement-D13261","A subscription agreement is the contract by which an investor agrees to purchase shares at a defined price and on defined terms for a specific round. The cap table reflects the outcome — the shares actually issued pursuant to that agreement. Subscription agreements are transactional documents; the cap table is the cumulative ownership record that incorporates every completed subscription.",{"vs":132,"vs_template_id":469,"summary":470},"term-sheet-D13235","A term sheet is a non-binding summary of the proposed economic and governance terms for a financing round. A cap table models what ownership will look like if those terms are accepted — the post-money share count, diluted percentages, and waterfall. Investors use the term sheet to negotiate; they use the cap table model to verify the economic consequences of what they are negotiating.",{"use_template":472,"template_plus_review":476,"custom_drafted":480},{"best_for":473,"cost":474,"time":475},"Pre-incorporation planning, two-founder companies with no external investors, and internal equity modeling","Free","2–4 hours initial setup; 15–30 minutes per update",{"best_for":477,"cost":478,"time":479},"Seed-stage companies with SAFEs or convertible notes, option pools, or a first institutional investor","$400–$1,200 for a corporate attorney review","1–3 days",{"best_for":481,"cost":482,"time":483},"Series A and later with multiple preferred classes, complex liquidation preferences, international shareholders, or pre-transaction due diligence","$1,500–$5,000+ (corporate counsel or specialized cap table advisory)","1–2 weeks",[485,490,495,500],{"code":486,"name":487,"flag_asset_id":488,"note":489},"us","United States","flag-us","US cap tables must reflect IRC Section 409A-compliant exercise prices for all option grants — non-compliance triggers a 20% penalty tax on employees. Delaware C-corporations, the dominant structure for venture-backed startups, require that authorized share counts appear in the Certificate of Incorporation filed with the Delaware Secretary of State. California and New York impose state-level securities notice requirements when issuing shares or options to employees in those states.",{"code":491,"name":492,"flag_asset_id":493,"note":494},"ca","Canada","flag-ca","Canadian Business Corporations Act and provincial equivalents (OBCA in Ontario, BCBCA in British Columbia) require companies to maintain a share register that the cap table must mirror. Stock option plans for Canadian employees must meet Income Tax Act requirements — specifically the conditions under Section 7 — to qualify for favorable capital gains treatment rather than employment income treatment at exercise. Quebec-based employees may trigger additional provincial tax considerations.",{"code":496,"name":497,"flag_asset_id":498,"note":499},"uk","United Kingdom","flag-uk","UK companies must maintain a statutory register of members under the Companies Act 2006, and the cap table must reconcile to it exactly. Enterprise Management Incentive (EMI) option schemes, which offer significant tax advantages for qualifying UK companies and employees, require HMRC registration and impose specific grant, exercise price, and reporting requirements that must be tracked at the cap table level. Share transfers above certain thresholds may trigger Stamp Duty at 0.5%.",{"code":501,"name":502,"flag_asset_id":503,"note":504},"eu","European Union","flag-eu","EU member states have distinct corporate registry and share register requirements — German GmbHs require notarized share transfers recorded in the commercial register, while French SAS structures allow more flexibility. GDPR considerations apply when the cap table contains personal data about individual shareholders, and access controls should limit distribution to those with a legitimate need. Cross-border equity grants to employees in multiple EU member states typically require country-specific legal review of option plan qualification and tax treatment.",[506,507,508,509,510,511,512,513,514,515,516,517],"shareholders-agreement-D1016","stock-option-plan-D13284","subscription-agreement-D12537","term-sheet-D473","investment-agreement-D12831","minutes-for-a-formal-meeting-D13","non-disclosure-agreement-nda-D12692","employment-agreement_at-will-employee-D541","founders-agreement-D13243","convertible-note-agreement-D870","minutes-of-meeting-of-directors-D14","business-report-D12762",{"emit_how_to":199,"emit_defined_term":199},{"primary_folder":97,"secondary_folder":520,"document_type":521,"industry":522,"business_stage":523,"tags":524,"confidence":530},"equity-and-mergers","worksheet","general","startup",[525,526,527,528,529],"equity","fundraising","ownership","cap-table","founders",0.92,"\u003Ch2>What is a Cap Table?\u003C/h2>\n\u003Cp>A \u003Cstrong>Cap Table\u003C/strong> (Capitalization Table) is a legal document that provides a complete record of every equity holder in a company — founders, investors, employees with stock options, and holders of convertible instruments such as SAFEs and convertible notes. For each holder it records the type of security owned, the number of shares or units, the price paid, and the resulting ownership percentage calculated on both a basic and fully diluted basis. It functions as the authoritative ownership ledger for a private company, and every material equity event — a new financing round, an option grant, a share transfer, or a convertible note conversion — must be reflected in it promptly and accurately.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>A cap table that is missing entries, out of date, or inconsistent with the share register is one of the most common causes of delayed or collapsed financing transactions and acquisitions. Investors request a current cap table before any term sheet, and acquirers examine it in the first hours of due diligence — errors discovered at either stage reopen negotiations, trigger price adjustments, or, in material cases, kill the deal entirely. Beyond transactions, an incomplete cap table creates day-to-day operational risk: option grants priced without a current 409A valuation expose employees to significant tax penalties, and founders who have not recorded vesting detail have no documentary basis to recover unvested shares from a departing co-founder. This template gives you a structured, legally grounded starting point — covering share classes, convertible instruments, option pool detail, ownership percentages, and a liquidation waterfall — so that your equity record is complete, current, and ready for the scrutiny that every significant business milestone will bring.\u003C/p>\n",1778696286585]