You and your co-founders need a capitalisation table so you understand and keep track of the ownership structure of your company.

It will help you to make quick decisions about the capital structure of your business. When you are raising new investment, it will help you to decide the important matters you will need to address, such as relating to your valuation, how many shares to issue and the potential for dilution of ownership. When you are hiring a new employee or advisor, it will help you to see whether you have enough shares available in your option pool and understand how the grant of new options will impact other equity holders.

You will need to share your cap table with lots of different people, so its important that you keep it up to date and clearly set out.

When an investor is looking to invest in a company, they will review the cap table to understand who owns equity in the company and look to identify any potential problems with the capital structure. This is essential to help them to work what valuation to place on the company, how much to invest and on what terms.