What Do You Need to Make Capitalisation Table Template?
It’s long known that businesses need a lot of money in order to be able to operate. One of the tricks to get funds is to sell the company’s stock to the public. Capitalization table is a common tool made by companies who have their stocks sold to the public. What is this table and why is it important to make one? Find out some important aspects you might know before making it. Plus, you will know a capitalisation table template can benefit you.
What is a Capitalization Table?
A capitalization table is a kind of spreadsheet used to list down the names of investors as well as their amount of ownership in a company. Not only that, this table is also used to note all securities of a company.
What are the Contents of a Capitalization Table?
- Shareholders’ names
- Common shares
- Preferred shares, and
- The percentage of ownership
A company’s cap table may be different with another company cap table. However, it must contain all of those points so that a table can be mentioned as a cap table.
How Cap Tables are used?
A capitalization table is generally used for these objectives:
- Raising funds
It’s clear that investors will need to see how the company’s ownership is managed and what changes that has occurred during the previous financing round. With a capitalization table, they can know where their fund sits on the liquidity rank. In addition, avoiding litigious issue with other investors is another indirect benefit they can get with this table.
- Tax and regulation compliance
Many countries use cap tables as their formal official record of a company’s ownership. Cap tables are required in order to set the right amount of taxes in hope that the shareholders don’t need to pay penalties which are able to be skipped.
- Selling the company
When a company is being sold to another company, this process will obviously gain funds to the company. A cap table is required so that each investor gained the share of the sales.
How Do You Make a Capitalization Table?
You can make a cap table using three methods:
- Making it yourself from scratch
- Using a template
- Using a cap table app (if you have one)
What App You Can Use to Make a Capitalization Table?
As mentioned, you can make a cap table with those three methods above. But then you might wonder what app you can use?
In general, people use spreadsheets to make a cap table. Even for a capitalisation table template, it is more common for .xls file to be found. With a spreadsheet, you don’t need to make tables after tables – all are already available in the app.
How to Use a Template to Make a Capitalization Table?
- Download a template. That will be great if you use a .xls/.xlsx format.
- With a spreadsheet app, open that template file.
- Enter your pre-made data about the company’s capitalization
- Review the file and save it afterwards.
That’s what capitalization table is and how you can make one using a capitalisation table template. With this template, shoo away the worry of making it untidy.