The cap table glossary, in two modes.

An independent appraisal of what your company's common stock is worth right now, used to legally set the price employees pay to exercise their stock options.

A tax filing that lets you pay tax on restricted stock's value now, while it's low, instead of later as it vests and potentially becomes worth much more.

A person or entity that meets specific income, net worth, or professional criteria under securities law, allowed to invest in private deals that aren't open to the general public.

A protection for investors that adjusts their ownership if the company later raises money at a lower valuation than they originally invested at.

The maximum number of shares your company's legal formation documents allow it to ever issue — a ceiling, not the number actually given out yet.

The group of people with formal authority to make major decisions for the company — approving fundraises, executive hires, and other significant actions.

A smaller, often quick funding round meant to extend your company's cash runway until a larger, formal round can be raised.

A single record of who owns what percentage of your company — every founder, investor, and employee, and exactly how many shares or options each one holds.

A calculation showing exactly how sale or liquidation proceeds get distributed across every shareholder class, in the specific order their rights entitle them to be paid.

A plan that reserves a portion of exit proceeds specifically for management and key employees — sometimes used when a low sale price would otherwise leave common stockholders with very little.

The initial stretch of a vesting schedule — usually the first year — during which no equity vests at all, no matter how much time has passed.

An agreement giving minority shareholders the right to sell some of their own shares alongside a founder or major shareholder if that person sells theirs.

The standard type of ownership shares, typically held by founders and employees, with no special financial protections beyond a proportional claim on the company.

A short-term loan from an investor that's designed to convert into equity later, usually at your next priced funding round, rather than being paid back in cash.

The reduction in your ownership percentage that happens whenever your company issues new shares — even though the company itself may be worth more afterward.

A protection that only speeds up your vesting if TWO things happen — your company gets acquired AND you lose your job because of it — not the acquisition alone.

A funding round priced at a lower valuation than the company's previous round — generally seen as a signal of reduced investor confidence.

A clause that lets majority shareholders force minority shareholders to go along with a company sale, so a small group of holdouts can't block an acquisition.

A program letting employees buy company stock, often at a discount, through payroll deductions over a set offering period.

The specific breakdown of who gets paid what, and in what order, when a company is acquired or otherwise sold.

The current, legally defensible value of one share of your company's stock — the number that determines what employees pay to exercise their options.

Founders agreeing to vest their own shares over time — just like an employee's grant — so someone who leaves early doesn't walk away with a large, fully-owned stake.

The total share count if every option, warrant, and convertible security were exercised or converted right now — the real denominator for calculating true ownership.

A type of stock option only available to employees that can qualify for lower long-term capital gains tax if you hold the shares long enough after exercising.

The actual number of shares that have been granted to specific people or entities so far — a subset of the total shares your company is allowed to issue.

A term that lets investors get their investment money back first when the company is sold — before founders and employees see any proceeds.

A stock option that anyone — employees, advisors, or contractors — can receive, but the difference between the strike price and the stock's value is taxed as regular income the moment you exercise.

A reserved chunk of company equity — typically 10-20% — set aside specifically for future employee stock option grants.

Shares currently held by shareholders, excluding any shares the company has bought back and holds in its own treasury.

A small, nominal dollar value assigned to each share at incorporation — often just $0.0001 — with little relation to what the stock is actually worth.

The value of your company immediately after a funding round closes — the pre-round value plus the new money raised.

What your company is judged to be worth right before a new round of investment is added on top of it.

A class of shares typically held by investors that comes with extra rights — like getting paid first in an acquisition — that common stock doesn't have.

An investor's right to put more money into your future funding rounds to maintain their existing ownership percentage, instead of automatically getting diluted.

A tax rule that can let you avoid federal tax on some or all of your gains when you sell stock in an eligible small company you've held for over five years.

A promise of company shares that converts into actual stock once vesting requirements are met — unlike an option, you don't pay anything to receive them.

A clause giving the company (or existing investors) the first chance to buy a shareholder's shares before that shareholder can sell them to an outside party.

An early-stage funding document where an investor gives you money now in exchange for equity later, once you raise a priced round — without setting a valuation today.

Typically the first significant round of outside funding, used to prove your early product and business model before a larger Series A raise.

Typically the first large, formally priced venture round — usually raised once a startup has real product traction and needs capital to scale.

A clause where just ONE event — your company getting acquired — is enough to immediately vest some or all of your unvested equity, whether or not you keep your job.

Adding more shares to your reserved employee-equity pool — usually requested by investors during a new funding round to keep enough equity available for future hires.

The fixed price you pay per share when you exercise a stock option — set when the option is granted, regardless of what the shares are worth later.

A protection that lets minority shareholders join in and sell their shares on the same terms if majority shareholders decide to sell theirs.

A short document outlining the proposed terms of an investment — valuation, amount, and investor rights — before the full legal paperwork is drafted.

The maximum company valuation at which a SAFE or convertible note converts into equity — protecting early investors from paying a much higher price later for the same risk they took early.

A waiting period — usually one year — before any of your equity grant becomes yours. If you leave before the cliff, you typically get nothing from that grant.

The timeline over which you earn your equity grant — most commonly four years, so you gradually gain full ownership the longer you stay.

The authority certain shares carry to vote on major company decisions — like approving a sale, electing board members, or amending governing documents.

A right to buy company stock at a set price in the future — similar to a stock option, but typically issued to investors or lenders rather than employees.