A founder once sent me a cap table as a screenshot of a spreadsheet, three rows deep, with the founders owning 100% and a cheery note that "the round will sort out the rest". It looked clean because it was empty. The round it was raising had two SAFEs already signed, an option pool the lawyers had agreed but not entered, and an angel from a year earlier who'd been left off entirely. None of that was visible. All of it was real.
That's the thing about a cap table. It's the single document that tells you what you actually own, and it's also the document most likely to be wrong, out of date, or quietly flattering. Learning to read one - and to ask for the version that isn't flattering - is among the more useful skills an angel can pick up, and it takes about ten minutes to learn the shape of it.
What is a cap table, exactly?
A capitalisation table is the register of who owns a company and in what proportion. At its simplest it's a list: each shareholder, the number and class of shares they hold, and the percentage that works out to. A seed-stage startup's might run to a dozen lines - two founders, a handful of angels, an early employee or two, and a block set aside for options.
It exists because ownership in a private company isn't a single number you can look up. It's the sum of every share issued, every option granted, every promise to issue shares later. The cap table is where all of that is reconciled into one view, and it's the basis for every important calculation that follows: what each person is paid in a sale, how a new round reprices everyone, who has the votes. In the UK, the legal source of truth for issued shares is the company's statutory register of members and its Companies House filings; the cap table is the working model built on top of that.
How do you read a cap table line by line?
Most cap tables share the same skeleton, whatever software produced them. Read them in this order and they stop being intimidating.
The shareholder, and their share class. Founders and angels usually hold ordinary shares. Later, priced investors often hold preference shares, which carry rights ordinary shares don't - notably a claim to be paid back first in a sale. Two people can own the same percentage and have very different positions if one holds preference and the other ordinary. Note the class, not just the count.
The number of shares. A raw count, meaningless on its own. Ten thousand shares could be 1% of the company or 90%, depending on how many exist in total. It only becomes information once you have the denominator.
The percentage - and which basis it's on. This is the figure you came for, and it's the one most often quietly misstated. A percentage can be calculated on issued shares (a smaller total, a bigger-looking slice) or fully diluted (a larger total, the real slice). More on that next, because it's the single most important distinction on the page.
Issued shares vs fully diluted: why the gap matters
Issued shares are the ones already allotted - sitting on the register, owned by a named person today. Fully diluted shares add everything that could become a share: the unallocated option pool, outstanding SAFEs and convertible notes, any warrants. It's the company as it would look if every promise to issue shares were honoured at once.
The gap between the two is where ownership quietly leaks. Say a founder tells you your £50,000 buys 5% of the company. On issued shares, today, that might be true. But if there's a 15% option pool yet to be filled and a SAFE due to convert at the next round, your fully diluted 5% is really closer to 4% once the dust settles - and lower again after the next raise. The honest question is never "what do I own today" but "what do I own once everything that's been promised is delivered".
The honest question is never what you own today, but what you own once every promise is delivered.
The discipline is simple: when anyone quotes you a percentage, ask whether it's issued or fully diluted, and insist on seeing the fully diluted view. A founder who can't produce one, or who flinches at the question, has told you something useful.
What does the option pool do to your stake?
The option pool is a block of shares set aside to grant future employees - typically 10% to 15% of the company at seed stage. It's a routine, sensible thing: startups hire with equity, and the equity has to come from somewhere. The somewhere is the cap table, and that means it dilutes the people already on it.
The detail that catches people out is when the pool is created relative to your money. If it's carved out of the pre-money valuation - the company's worth before the new round - the founders absorb that dilution, and you're buying into a company where the pool already exists. If it's topped up after, out of the post-money company, then everyone, you included, is diluted to create it. Same headline pool, very different effect on your slice. It's the kind of line that's easy to wave through and expensive to ignore.
How do SAFEs and convertible notes change the picture?
A SAFE (Simple Agreement for Future Equity) or a convertible note is money already in the company that turns into shares at a later round - usually at a discount to that round's price, or capped at an agreed valuation. The trouble is that until it converts, it can sit on the cap table as a footnote rather than a line of shares. A table can look reassuringly tidy while carrying a wave of dilution that lands the moment the next round prices.
So when convertibles are in play, ask for the fully diluted model that converts every one of them at its terms and shows you the resulting percentages. A £200,000 SAFE with a 20% discount and a £3 million cap doesn't mean much as a sentence; it means a great deal as a row in the post-conversion table.
One British wrinkle worth flagging: a plain SAFE often won't qualify for SEIS or EIS relief, because those schemes generally need shares issued at the time you invest, not promised for later. Many UK rounds use a priced round or an advance subscription agreement instead, precisely to keep the relief alive. If the tax break is part of your reasoning, the instrument on the cap table matters as much as the price.
Where does the cap table meet SEIS and EIS?
The cap table doesn't grant tax relief, but it's where the conditions for relief show up. SEIS and EIS generally require ordinary shares carrying no preferential right to your money, so a structure that loads your shares with a preference, visible on the table as a separate class, can put the relief at risk. So be precise about the reliefs, because they're often half the reason an angel is comfortable with the risk in the first place.
SEIS offers 50% income tax relief on up to £200,000 of investment per tax year, with a three-year minimum hold; gains on the shares are exempt if you hold for at least three years and received the income tax relief, and loss relief is available if it goes wrong. On the company side, SEIS is for genuinely early ventures - broadly trading for less than three years, fewer than 25 full-time-equivalent employees, and gross assets under £350,000 at the share issue, with the company able to raise up to £250,000 in total under the scheme. EIS offers 30% income tax relief on up to £1,000,000 a year (or £2,000,000 if at least £1,000,000 goes into knowledge-intensive companies), also on a three-year hold, with capital gains deferral and loss relief available. The EIS company-side limits - gross assets, the annual and lifetime amounts a company can raise, the age limit, and the knowledge-intensive variations - are larger and were adjusted for 2026; confirm the figures that apply to a specific deal on HMRC's EIS guidance on gov.uk.
For both schemes the mechanics are the same: the company should hold advance assurance from HMRC before the round, and it issues you an SEIS3 or EIS3 certificate after your shares are allotted, which you use to claim through Self Assessment - and relief can be carried back to the previous tax year. You generally need to be a UK taxpayer for any of it to be worth having. The full investor rules are on gov.uk.
How should an angel actually use the cap table?
Ask for it early, before the term sheet hardens, not after. Read it fully diluted. Find the option pool and check its size and its timing. Model every convertible at conversion. Note who holds preference shares and where you'd sit behind them in a sale. Then do the one calculation that matters most: your likely percentage not today, but two rounds from now, after the dilution that funding the company will inevitably bring. That number, not the one on the screenshot, is the one to make peace with.
A word on what this article is and isn't: it's general information, not financial or investment advice. Cap tables sit alongside legal documents, and the tax rules around them change. Before you commit capital, take advice from an FCA-regulated adviser and, where shares and contracts are involved, a solicitor - and confirm the current tax position with HMRC on gov.uk.
Frequently asked questions
What is the difference between issued and fully diluted shares on a cap table?
Issued shares are the ones already allotted and sitting on the register. Fully diluted shares add everything that could become a share if every option, warrant and convertible were exercised or converted - the unallocated option pool, outstanding SAFEs and convertible notes, the lot. Your percentage on an issued basis always looks larger than your percentage fully diluted, because the denominator is smaller. When you negotiate ownership, work in fully diluted terms; it's the honest figure and the one that survives the next round.
How do I calculate my ownership percentage from a cap table?
Take your number of shares and divide by the total share count, then multiply by 100. The catch is which total you use. Dividing by issued shares gives a flattering number; dividing by the fully diluted total - including the option pool and any convertibles - gives the figure that matters at an exit. If you put in £50,000 at a £200,000 post-money round you'd expect roughly 25% on a simple basis, but the option pool and any SAFEs will pull the fully diluted figure below that. Always confirm which denominator a quoted percentage uses.
What is the option pool on a cap table and why does it matter?
The option pool is a block of shares set aside for future employees, usually 10% to 15% of the company at seed stage. It matters because of when it's created. If the pool is carved out of the pre-money valuation, the founders absorb that dilution before your money goes in, and you buy into a company where the pool is already accounted for. If it's topped up after your round, everyone including you is diluted to create it. The size and the timing both change what your stake is actually worth, so read the pool line carefully.
How do SAFEs and convertible notes show up on a cap table?
Often they barely show up at all, which is the problem. A SAFE or convertible note is money already in the company that converts into shares at a later round, usually at a discount or a capped valuation. Until it converts it may sit as a footnote rather than a line of shares, so a cap table that looks clean can have a wave of dilution waiting in it. Ask for the fully diluted view that models every outstanding convertible at conversion, and note that a plain SAFE often won't qualify for SEIS or EIS relief because those schemes generally need shares issued at the time you invest.
Does the cap table affect my SEIS or EIS tax relief?
Indirectly, yes. SEIS and EIS relief generally require ordinary shares with no preferential right to your money, so how your shares sit relative to others on the cap table can matter for eligibility. The reliefs also depend on the company qualifying - on the SEIS side, broadly trading under three years, fewer than 25 full-time-equivalent employees and gross assets under £350,000 at the share issue - and on holding HMRC advance assurance, with SEIS3 or EIS3 certificates issued after your shares are. This is general information, not advice; confirm the current rules on gov.uk and take FCA-regulated advice before investing.