Reading a Capitalization Table
A capitalization table is the ledger of who owns a company. Founders, employees and investors each hold their share, and the table records every class of stock and every option beside its holder.
The useful reading is the fully diluted view. It counts not only the shares outstanding today but everything that could become a share: options granted, options still in the pool, warrants, and notes waiting to convert.
Before agreeing to a round, read the table twice, once as it stands and once as it will stand after the money arrives. The difference between those two readings is the true price of the financing.
A tidy table is also a signal. When ownership is clear and the pool is honestly sized, the negotiation ahead tends to be clear as well.