When it comes to starting a business, there never seems to be an end to work needed to be done. The challenge of being an entrepreneur and creating something from the ground up is substantial. However, it’s typically a part of their passion for entrepreneurs.
During this formative time in a company’s history, it’s easy to feel overwhelmed to keep track of everything. Not only do you have to concentrate on keeping the company moving, honing its goods and services, and creating a successful marketing presence, but also you have to keep careful track of existing resources.
For a company of any age, a capitalization table (AKA cap table) is an excellent tool for helping to keep track of a company’s equity and ownership. If you are wondering to yourself, ‘What is a cap table?’, don’t worry, it’s easy to learn.
Capitalization Table: Information You Need to Keep Track Of
A capitalization table is a table of data that documents a companies equity and market value. What exactly does that mean? When a company first starts, it will have shareholders that are investing in the company to see it become successful. These shares are the lifeblood of how a company gets its feet under itself and starts to turn a profit.
For any startup, the beginning stages are always going to be the hardest. Whether or not you have a product that is sure to change the world and make a killing, the truth is you need some capital to get that product, goods, or service out on the market. The adage, it takes money to make money, is never more realized than by the entrepreneur.
There are a couple of ways of getting this equity to start a company. For some entrepreneurs, it looks like sinking their entire life saves and personal equity into the company. This makes them a majority shareholder. This means they own the company, its product, and most of its profit. In addition, loans and investments become easier.
Finding investors who are willing to see your vision for your company and buy shares into your startup is a powerful way of acquiring the means to get your legs under you and produce! When this happens, the information you obtain through these shareholders is vitally essential for several different reasons.
These shareholders are more than just curious business ventures – they quite literally own whatever percentage of the company their shares represent. That being said, they are primarily responsible for your dream to come to life. That means there’s a heavy responsibility to ensure these shareholders know what their investment looks like and is actively doing.
When a business starts up, it can seem overwhelming to keep track of so much information. However, utilizing a cap table and keeping it updated with current information allows you to keep shareholder reporting information accessible easily. A cap table provides vital peace of mind as it documents your company’s exact equity and shareholding information. In addition, it will always show you how many shares are reserved, authorized, and invested!
So no more panicking about how to correctly populate shareholder reports, as a cap table keeps track of this sensitive and essential information. It will be ready for you the moment that you need it.
Accurate Insight Into Market Value
By keeping track of your company’s equity through a cap table, you can constantly monitor its current market value. This is vital to support your shareholder’s investments and grow their trust. It also gives you essential information when thinking about making financial decisions that could influence your company’s market value.
Get Help From the Pros
With the SUP cap table software, you’ll have access to building three versions that best help your startup. You can pick and choose which one you want to use, which can ensure that you have access to this incredible tool even on a budget.
Not only that but with an expertly designed interface, all of your reports are easily accessible. In addition, if you ever have a question, SUP’s team of professional support is always on hand. So whether you are just starting and are setting up a cap table for the first time or wanting to switch to new software, consider using SUP. With powerful insight into your company’s market value and accurate reports on your company equity, you can be equipped to make the best decision to help your company reach success.