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- Cap Table shows the ownership structure of a company and changes through various financing rounds.
- Important components are shareholders, share classes, number of shares and their percentage share.
- Legal aspects in Germany emphasize compliance with the articles of association and investment agreements.
- The cap table is crucial for financing rounds, exit planning and employee participation.
- The challenges are timeliness, data complexity and the need for transparency.
- Careful maintenance of the cap table is crucial for compliance and the success of the company.
- Suitable software and expert advice support the effective management of the cap table.
A cap table (capitalization table) is a tabular overview of the ownership structure of a company, especially a start-up. It shows who holds which shares in the company and how these shares change as a result of various financing rounds. The cap table is a central document for the corporate governance and financial planning of a startup and plays an important role in negotiations with investors and the planning of exit scenarios.
Content and structure of a cap table
A typical cap table contains the following information:
1. shareholders: List of all shareholders, including founders, employees with shares in the company and investors.
2. share classes: Distinction between different types of shares, e.g. ordinary shares and preference shares.
3. Number of shares: Listing of the number of shares held by each shareholder.
4. Percentage share: Presentation of the percentage share of each shareholder in the total company.
5. Options and convertible bonds: Listing of outstanding options, convertible bonds or other financial instruments that may lead to dilution.
6. Valuations: Information on the company valuation in various financing rounds.
The cap table is generally kept in chronological order and shows the development of the ownership structure over various financing rounds.
Legal aspects in Germany
In Germany, there is no legal obligation to keep a cap table in the form described above. However, companies are obliged to keep a share register showing the shareholders and their shareholdings. The cap table goes beyond this and provides a more detailed overview of the ownership structure and potential dilution effects.
There are various legal aspects to consider when creating and maintaining a cap table:
1. articles of association: the cap table must comply with the provisions of the articles of association.
2. investment agreements: Agreements from financing rounds must be correctly mapped.
3. Employee participation programs: Options and other forms of participation for employees must be taken into account.
4. Data protection: Data protection regulations must be observed when managing the cap table, especially if personal data is included.
Importance and challenges
The cap table plays a central role in important corporate decisions and events:
1. financing rounds: It serves as a basis for negotiations with potential investors and for calculating dilution effects.
2. Exit planning: In the case of sales or IPOs, the cap table is crucial for the distribution of proceeds.
3. Employee participation: It helps with the planning and administration of employee participation programs.
4. Compliance: A correctly managed cap table supports compliance with legal and tax obligations.
With the increasing complexity of the ownership structure, particularly as a result of several financing rounds, careful maintenance of the cap table is becoming increasingly important. The challenges here are
1. timeliness: the cap table must be constantly updated to reflect all changes in the ownership structure.
2. complexity: different share classes, options and convertible bonds can make the calculation of shares complicated.
3. transparency: a balance must be struck between transparency and confidentiality.
Conclusion
The cap table is an indispensable tool for start-ups and growth-oriented companies in Germany. It provides a clear overview of the ownership structure and is crucial for planning financing and exits. Careful and regular maintenance of the cap table, supported by suitable software and expert advice, is of great importance for the success and compliance of the company.
