How to Structure Your Cap Table for Series A

Preparing for Series A funding requires careful attention to your capitalization table structure. A well-organized cap table not only facilitates the fundraising process but also sets the foundation for future growth and additional funding rounds.

What is a Cap Table?

A capitalization table (cap table) is a detailed breakdown of a company's equity ownership, including:

• Common stock held by founders and employees
• Preferred stock held by investors
• Stock options and warrants
• Convertible securities (SAFEs, convertible notes)

Pre-Series A Cap Table Cleanup

1. Resolve Outstanding Issues

Before approaching Series A investors, ensure your cap table is clean:

• Convert all SAFEs and convertible notes into equity
• Finalize founder vesting schedules with proper cliff periods
• Clean up any messy early equity grants or advisor shares
• Ensure all equity grants are properly documented

2. Optimize Founder Equity

Typical founder equity distribution:

• Single founder: 80-90% before any funding
• Two founders: 60-80% combined (split based on contribution)
• Three+ founders: 50-70% combined

3. Employee Option Pool

Series A investors typically expect:

• 15-20% option pool for employee incentives
• Pool should be created before the Series A round
• Consider future hiring needs for 12-18 months

Ideal Series A Cap Table Structure

Target Ownership Percentages

After Series A, a healthy cap table typically looks like:

• Founders: 50-70%
• Series A Investors: 20-30%
• Employee Option Pool: 15-20%
• Advisors/Early Investors: 5-10%

Use our Cap Table Simulator to model different Series A scenarios and see how various terms affect your ownership structure.