I'm splitting equity with cofounders—how do cap tables work?
You are about to give away pieces of something that does not exist yet. People will hold those pieces forever. And you don't understand the document that records it. That is not a small gap. Close it before you sign anything, not after. Most founders who say they 'don't understand cap tables' actually handle the arithmetic fine. What they avoid is the conversation underneath it: who is worth what, who takes the real risk, who could be replaced tomorrow. The spreadsheet just makes that conversation impossible to dodge. You do not need an MBA. You need four ideas, practice with your own numbers, and the direct conversation you have been postponing.
A cap table is a list: who owns what percentage of your company, and what happens to those numbers when you add investors, option pools, or new hires. Learn four things—shares, percentage ownership, dilution, and vesting—and you will understand every cap table you ever see. The math is not the hard part. Honesty about value is.
What changes unlock by starting
- You can read any cap table and know who actually controls the company.
- You can calculate your own dilution after any new round, hire, or option grant.
- You stop agreeing to terms you don't understand, in rooms where that costs you.
- You have the ownership conversation with your cofounders before silence turns into resentment.