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    Capitalization Table

    Ledger of all securities issued by a company and who owns them.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

    Definition

    A cap table is a structured record of every share, option, warrant, SAFE, and convertible note issued by a company, showing fully-diluted ownership across founders, employees, and investors at each financing round. Cap tables are maintained in spreadsheets or equity management software and must match board approvals and stock ledgers. Investors and acquirers review them closely in due diligence, and errors can delay a financing or sale. Pro forma cap tables model how a new round, pool increase or conversion would change ownership.
    What the regulation says
    A capitalization table is a corporate financing record, not a MedTech-specific regulatory filing. In the United States, the Securities Act of 1933, enacted May 27, 1933, governs securities offerings. Section 5 establishes registration requirements, while Section 4(a)(2) exempts transactions by an issuer not involving a public offering. A cap table helps document securities issued in these transactions, but does not itself establish that an exemption applies. The Securities Exchange Act of 1934, enacted June 6, 1934, includes Section 10(b), an antifraud provision relevant to deceptive conduct connected with securities purchases or sales. Misleading ownership information can therefore create legal risk, depending on the circumstances. Neither statute prescribes a universal cap table template. Companies should reconcile capitalization records with legally authorized issuances, stock ledgers, signed financing documents, and applicable corporate law. Outstanding shares should be distinguished from reserved options and securities whose conversion depends on future events; fully diluted presentations should identify their assumptions. Investors and acquirers typically review these records during due diligence, rather than through routine medical-device regulatory review. Discrepancies may require legal correction and can delay financing or acquisition.

    What this means in practice

    Investors will diligence the cap table line-by-line. Common MedTech red flags: unissued advisor shares, unrecorded SAFEs, mis-vesting on founder shares, or a missing 83(b) election. Cap-table software (Carta, Pulley) is now standard.

    Examples

    • A MedTech startup used its cap table to show a venture capital firm the fully-diluted ownership of each founder and early employee, demonstrating their equity stakes after a seed round.
    • During an acquisition diligence, the acquirer meticulously reviewed the target company's cap table to confirm all convertible notes and SAFEs had been properly accounted for and converted, ensuring a clear ownership structure.
    • A MedTech company updated its cap table to reflect the issuance of new employee stock options from its equity pool, illustrating the new ownership percentages for existing shareholders on a pro forma basis.
    Common pitfalls
    • •Maintaining the cap table in a spreadsheet - error-prone and a diligence nightmare by Series B.
    • •Forgetting to model option pool refreshes at each round.

    Frequently asked questions

    Common red flags include unissued shares promised to advisors that were never formally granted, SAFEs or convertible notes that were issued but never properly recorded, founder shares without a completed vesting schedule or a timely 83(b) election, and inconsistent share numbers between the company's internal spreadsheet and its actual stock ledger or transfer records. Any of these can delay or derail a financing because incoming investors need certainty about fully diluted ownership before they will finalize a term sheet.

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    Sources

    3 sources

    Every citation below opens the original document. Each is graded against our source-tier hierarchy so you can see what rests on binding law versus commentary.

    Tier 4Trade press and expert commentary· 3
    Link health: 3 verified· last checked 2026-06-20
    Carta·1NVCA·1SVB·1
    1. 1
      Carta cap table 101
      Tier 4 Verified
      Cartacarta.com
    2. 2
      NVCA Model Documents
      Tier 4 Verified
      NVCAnvca.org
    3. 3
      Silicon Valley Bank - Healthcare Reports
      Tier 4 Verified
      SVBsvb.com

    Inline markers like [1] jump to the matching reference above.