Build a VC-ready cap table

Frequently asked questions

• What is a fully diluted cap table?

  A fully diluted cap table shows ownership as if all options, warrants, and convertible instruments have been exercised. Investors use this to understand the maximum potential dilution of their stake in the company.

• Do I legally need a cap table in the UK?

  No. UK companies are only legally required to maintain a statutory register of members at Companies House. However, a cap table is considered essential best practice and is expected by most investors during fundraising.

   

• When should I create a cap table?

  The best time is from day one. Starting early makes it easier to track ownership changes, avoid errors, and stay investor-ready. Retrofitting a cap table later can be complex and error-prone.

• What is dead equity in a cap table?

  Dead equity refers to shares held by individuals who no longer contribute meaningfully to the business. It can reduce alignment, complicate fundraising, and signal weak early equity planning to investors.

• What are preference shares?

  Preference shares are typically issued to investors and include additional protections, such as liquidation preferences, anti-dilution rights, or enhanced voting rights.
  

• Can a messy cap table stop investment?

  Yes - in some cases. A messy cap table can slow due diligence, create legal uncertainty, reduce investor confidence, and occasionally prevent a funding round from completing.