Cap Table Template: What Sequoia and Series A Investors Expect
A clean, fully diluted cap table is one of the first documents a lead investor requests in due diligence. Sequoia, a16z, and Index Ventures all have standard due diligence checklists that include cap table in the first five items — here is the format they expect.
What Cap Table Format Sequoia and Series A Investors Expect
The first thing a lead investor's legal team does after a term sheet is signed is request a fully diluted cap table. At Sequoia, a16z, and Index Ventures, the standard due diligence checklist is often sent within 48 hours of term sheet signing — and the cap table is item three or four on that list, behind only the last audited financials and the certificate of incorporation. A cap table that takes more than a day to produce, contains errors, or is missing information signals organisational weakness at exactly the moment founders most need to appear strong.
The format that top VC legal teams prefer is a fully diluted capitalisation table showing every shareholder, every share class, every outstanding option and warrant, and every convertible instrument — SAFEs, convertible notes, and any commitments that have not yet converted — on a single spreadsheet. The 'fully diluted' requirement means including every share that would be issued if all options were exercised, all convertibles converted, and all warrants exercised, even if the exercise price is underwater. This number is almost always higher than founders expect.
HV Capital and Earlybird, two of Europe's most structurally rigorous funds, pay particular attention to the ESOP column during due diligence. The question they are really asking is: has this company already given away equity informally — side letters, verbal commitments, consultant agreements with equity components — that is not reflected in the official cap table? Any discrepancy between the official cap table and the actual ownership picture creates a significant due diligence red flag that can delay or kill a term sheet.
YC-backed companies have a structural advantage in cap table due diligence because the YC SAFE, which most YC companies use for their pre-seed raise, is a standardised instrument with well-understood conversion mechanics. Investors reviewing a YC-company cap table know exactly how to model the SAFE conversion at the Series A. Founders using non-standard instruments — particularly customised convertible notes with unusual valuation caps, discounts, or conversion triggers — should expect more questions and longer due diligence timelines.
Template Structure: Section by Section
Every section explained — what it contains, why it matters, and how top investors evaluate it.
- 1
Shareholder Name and Entity Type
Full legal name of every shareholder — individuals listed by full name, entities by their registered name. Include the entity type (individual, LLC, LP, trust) because the investor's legal team needs this for KYC, FCPA compliance, and wire instructions at close.
- 2
Share Class
Every distinct class of shares: Founder Common, Employee Common, Series Seed Preferred, Series A Preferred, SAFE (by cohort), convertible notes, warrants. Each class has different rights, and the column must clearly distinguish them because the liquidation waterfall calculation depends entirely on the class distinctions.
- 3
Shares Issued and Outstanding
The number of shares actually issued and held by each shareholder. This is the 'issued and outstanding' count — it excludes unissued options in the option pool and unconverted instruments. The sum of this column is the issued and outstanding share count before the current financing.
- 4
Options Granted and Unvested
For each employee who holds options: shares granted, shares vested, shares unvested, exercise price, and vesting schedule. Unvested shares are included in fully diluted calculations but are particularly relevant for acquirers modelling retention cost. The option pool column should show granted versus reserved.
- 5
Convertible Instruments
Every SAFE, convertible note, and warrant listed by investor, principal amount, conversion cap, and discount. Include the assumed post-money valuation cap (for SAFEs) and the maturity date (for notes). The conversion mechanics determine how these instruments affect the Series A cap table.
- 6
Fully Diluted Ownership Percentage
Calculated as each shareholder's share count divided by the total fully diluted share count. The total fully diluted count includes outstanding shares, all options granted (vested and unvested), all reserved but unissued options, and all shares issuable upon conversion of outstanding convertible instruments. This is the number investors use to model their post-investment ownership.
- 7
Price Per Share and Liquidation Preference
For preferred shareholders: the original issue price, the current liquidation preference per share (OIP × preference multiple), and any accrued dividends. This section drives the liquidation waterfall calculation that both founders and investors need to model different exit scenarios accurately.
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Get Started FreeCommon Mistakes Founders Make
The most common cap table mistake is failing to account for all convertible instruments. Many early-stage founders accept investment via SAFEs or convertible notes and then lose track of the precise terms — particularly the post-money cap on SAFEs issued at different valuations — over the course of multiple pre-seed rounds. When a lead investor's legal team models the Series A conversion, discrepancies between the term sheet assumptions and the actual conversion mechanics can cause the deal to re-price or, in rare cases, fall through.
Founders frequently maintain their cap table as a static snapshot rather than a dynamic model. A cap table that does not include a scenario analysis tab — showing pre-investment ownership, post-investment ownership with option pool refresh, and post-investment ownership after SAFE conversion — makes it impossible for investors to understand their ownership position after close. Building the scenario model before due diligence begins saves weeks of back-and-forth.
The third error is informal equity commitments — verbal promises of options to early advisors, consultants, or employees that have not been formally granted through board approval and paperwork. These commitments, if discovered in due diligence, create legal liability and reputational risk. Every equity commitment, no matter how small or informal, should be documented and reflected in the cap table from the moment it is made.
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