Is a Cap Table Confidential?

Often when people ask us about the confidentiality of a cap table they’re curious if there is a legal requirement to make their cap tables public. The answer to this question is no. In fact, most companies choose to keep their cap tables private and confidential. 

Even so, there are several parties within a company that need access to certain information on your company’s cap table. It’s important to manage access to ensure your cap table stays accurate while providing the necessary visibility to the right people. 

Levels of Cap Table Information Access

There are several levels of visibility you can set on your company’s cap table. These levels include the following:

  • Publicly available information
  • Employee stock options details
  • Ownership and shareholder information
  • Full visibility

Publicly available information includes a general overview of company shares information. Such details as share capital, the total number of shares and their corresponding values, as well as the amounts unpaid by shareholders. Furthermore, this level of visibility can also go into more depth about individual shareholder details and those who have significant control within this realm. 

Employee stock options information makes known the details for employees who hold stock options. It can also include the number of shares, vesting plan details, and exercise details, as well as trigger information and expiration dates. 

The third level of information access focuses on the specific dates of ownership and dilution. For example, if an employee holds options, they should be able to view a status snapshot of ownership percentage at the time options were granted. This information could include specific percentages of ownership, a shareholding summary, and classes and associated rights. It is important to keep such “snapshots” up-to-date as they can quickly fall out of date. 

Full visibility is a live view of your company’s cap table. This view should include full information concerning ownership percentages, the total number of shares, share classes and rights, total aggregate value, shareholder details, stock options, and shareholder agreements. 

Now that you have a clearer understanding of the levels of visibility you can grant, let’s take a look at who should have access to your cap table in the first place. 

Who Should Have Cap Table Access?

There are three main groups of people who should have access to your cap table: 

  • Investors
  • Board of Directors
  • Employees 

Each party should have access to a different set of information. 

Investors

Your existing investors should be able to see information about how their investment is doing in real-time. This includes being able to ascertain how their stake changes as your company brings in new investments. 

Historically, potential investors are provided with a snapshot of the ownership that reflects shares on one specific date. This static view of the company on cap tables usually includes redacted details that may be considered private to those not yet invested in the company. 

Board of Directors

There is no legal requirement for you to share your cap table with your Board of Directors. If you choose to do so, you will find that it is beneficial as your Board makes strategic decisions and advises your company. Giving them more details helps them make more informed decisions. 

The reason some companies are hesitant to allow their Board of Directors access to cap tables is that it can prove to be technically cumbersome. For this reason, you want a cap table that makes it easy for you to invite Board members with view-only access. 

Employees

The most common practice when it comes to giving employees access to your cap table is to offer it to senior management. Those who hold roles such as CFO, CTO and COO. Additionally, if other employees have a stake in the business, it shows goodwill and makes sense for them to also be granted visibility. 

That said, there is one big caveat to this practice–you should treat employee access to cap table information like you treat their access to other employees’ salaries. If employees spot a set of numbers they feel are unfair or they interpret as a reflection of favoritism, it could cause friction. 

Cap Table Access Made Easy with Astrella

When you have direct access to managing your cap table, granting visibility to the right people is simple. Request a free demo of Astrella’s all-in-one cap table management software today!

About the Author

Carine M. Schneider, FGE (Fellow of Global Equity), is an experienced and well-connected leader in the private market and global compensation industry with extensive experience working in consulting, technology, and financial services. She was named one of the 100 Influential Women in Silicon Valley by the Silicon Valley Business Journal and one of 17 “Women to Watch” in 2017 by Brown Brothers Harriman Center on Women and Wealth. Follow Carine on Twitter and LinkedIn.

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