Cap table is an abbreviation for capitalization table. It is nothing more than a spreadsheet which allows interested parties to see how the capital of a company is structured. It typically lists owners, executives, and sometimes can also include other employees. There are several different management options for a cap table. Here are three of them.
Self-Managed
As with most things involving finance, you can always manage Cap Table Tracking yourself. This is a form of management that start-up companies typically choose because their cap tables are still in a stage of simplicity and it is also free for them to do. This way, however, is not the most recommended way as it is very easy to miscalculate and needlessly give up equity in your own company.
Outsourced
This is another way that companies can track their cap table. When the term “outsourced” is used, it simply means that a legal team is now in charge of managing the cap table. This is the best way to make sure that the company remains compliant with financial laws and that the numbers are accurate. The only drawback is that the legal team may not be experts in scenarios of raising or exiting.
Hybrid
Hybrid management is obviously a combination of the previous two mentioned types of management. Most larger companies perform cap table tracking this way because it offers the best of both worlds. Aspects can be outsourced to a third-party legal team as well as the tracking is performed by in-house software.
If you are interested in learning how cap tracking can benefit you, contact Colonial Stock Transfer Company, Inc. at http://www.colonialstock.com/.
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