For an entrepreneur capitalization tables (“cap tables”) are amongst the most important documents to understand. A cap table lays out who the shareholders are in a company and how many shares they own. Although this sounds like a simple exercise, it can grow increasingly complex when a company matures to keep track of all shareholder information, ownership positions, rights to purchase additional equity in the future, vesting schedules, voting percentages, share prices and preference clauses. Besides, rather than being a plain register, the cap table is an important decision-making tool in key events evolving around financing, ownership and exit. This is also the reason that investors closely evaluate a venture’s cap table as part of the financing process and there are number of ways its makeup can be a deterrent to investors (also called a “broken cap table”). In this blog post we will walk through the most critical elements to help founders effectively manage their cap table.