How to Use Cap Table Software to Track Your Equity Investments

Many companies use a “cap table” to keep track of securities they have issued and who owns them. In the past, companies would build large cap tables from scratch using spreadsheet software. Today, companies can use cap table software to streamline the entire process.

The Importance of Software

Companies that issue stock or other securities such as bonds or options should have a detailed cap table. However, as a company starts to expand and grow, cap tables can get complicated. When companies start to mature and issue more securities, a simple spreadsheet is usually not enough to track and record every share of stock or options issued to investors.

With cap table software, a company can easily track and record each security it issues. Additionally, companies can easily evaluate how the structure of their equity impacts financing decisions. If a startup is raising money through venture capital or other outside investors, a cap table will show how many shares of the company each investor owns and how much money those investors put into the business.

Software for cap tables also reduces the amount of time companies spend on maintaining their tables. Additionally, the software significantly lowers the risk of manually recording inaccurate information in a spreadsheet.

When to Use Software

Most experts recommend that all public companies who issue securities or use outside investors to raise additional capital use software for cap tables. Startups should implement the use of software immediately.

Cap table software gives companies an easy platform to manage their ownership structure. Instead of examining mountains of equity documents individually using a spreadsheet, the software allows companies to automatically update when they issue securities and who bought the securities. A high-quality platform gives companies more time to focus on building their business rather than constantly tracking who invested in the company. For more information visit Colonial Stock Transfer Company, Inc.

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