I get this question all the time. At dinners, in board meetings, from founders I'm thinking about backing. "Sahin, how do you actually keep track of everything?" They see the 200+ angel investments, the two exits, the portfolio of companies we manage at our fund, and they imagine some kind of chaotic, high-frequency trading floor. It's nothing like that.
My secret weapon isn't a caffeine addiction or a team of a hundred analysts. It's a boring, old-school spreadsheet on steroids: the capitalization table. The cap table is the single most critical document for any venture fund, and honestly, for any startup. It's the source of truth. It’s the story of the company written in numbers.
Managing our $100M fund and its portfolio of 8 core companies isn't magic. It's a system. And today, I'm going to open up our playbook and show you the exact framework we use. Forget the high-level theory. This is a transparent, behind-the-scenes look at our process, our templates, and the tools we use to track every single dollar.
Why Most People Get Cap Tables Wrong
Most founders, and even some investors, see the cap table as a necessary evil. It's that annoying document the lawyers ask for during a fundraise. They update it, send it off, and forget about it. This is a massive mistake.
A cap table isn't just a list of who owns what. It's a strategic tool. It’s a predictive model for the future of the company. It tells you who gets diluted, who has control, and who really gets paid when the company is sold. If you don't understand it, you're flying blind.
I once passed on a Series A investment in a hot company, even though the founder was brilliant and the product was flying off the shelves. Why? I spent a full day digging into their cap table. It was a complete mess. They had promised the same shares to two different advisors, the employee option pool was calculated incorrectly, and there was a weird class of non-voting shares that belonged to the founder's cousin. It was a house of cards. Six months later, the company imploded during a legal dispute between early investors. The cap table told the whole story before it happened.
Our Cap Table Stack: Simplicity Over Everything
You might expect us to use some crazy, expensive, AI-powered software. We don't. For years, we ran everything on a meticulously designed set of Google Sheets. We only recently moved over to Carta, and I still think a well-structured spreadsheet is all you need to get started.
The tool is less important than the discipline. Here’s what our system is built on:
- A Master Template: We have one Google Sheet template that we clone for every new investment. It has separate tabs for the main cap table, a pro-forma model for future rounds, an employee option pool tracker, and a history of all transactions.
- Single Source of Truth: All legal documents—stock purchase agreements, convertible notes, SAFEs—are linked directly from the cap table. If it's not in the cap table, it doesn't exist.
- Scenario Modeling: This is where the magic happens. Before we make any follow-on investment, we model out at least three scenarios: the "base case," the "home run" (e.g., a 10x valuation increase), and the "down round." The cap table shows us exactly how our ownership, the founders' ownership, and the employee pool will be affected in each case. It takes the emotion out of the decision.
The Anatomy of Our Cap Table
Here are the columns we live and die by. It's more than just names and share counts.
| Column Header | What It Is | Why It's Critical |
|---|---|---|
| Investor/Shareholder | The name of the person or fund. | Obvious, but it needs to be the exact legal name. |
| Security Type | Common, Preferred (Series A, B, etc.), SAFE, Convertible Note. | This determines who gets paid first and what rights they have. The most important column on the sheet. |
| Investment Amount | The total cash invested. | We track this to calculate our return multiples (DPI, TVPI). |
| Share Price | The price paid per share in that round. | Used to calculate the valuation and dilution. |
| Share Count | The number of shares owned. | The raw number that everything else is based on. |
| Fully Diluted % | The ownership percentage assuming all options, warrants, and notes convert. | This is the real ownership. Anything else is a vanity metric. |
| Liquidation Preference | The multiple on the investment that an investor gets back before others. | A 1x preference is standard. Anything higher can crush founders and employees. We watch this like a hawk. |
| Pro-Rata Rights? | A simple "Yes/No" column. | This tells us if we have the right to invest in future rounds to maintain our ownership percentage. |
Our Process: From First Check to Exit
Our process is a rhythm. It’s a checklist we follow for every single investment.
The First Check: As soon as a deal is closed, we create a new cap table from our template. We don't wait. We input the data directly from the signed legal docs. The founder gets a read-only link. Transparency from day one.
Modeling a Follow-On: Let's say one of our portfolio companies is raising a Series B. The founder sends us the draft term sheet. We immediately plug the numbers into our "pro-forma" tab. We model the new valuation, the size of the new option pool, and our potential follow-on check. We can see in seconds how it impacts our ownership. This allows us to make a decision in hours, not weeks.
Tracking Secondaries: We were early investors in a company that started allowing secondary sales for employees. This can be a nightmare to track. We created a separate "Secondary" tab in our cap table to record every transaction: who sold, who bought, the price, and the date. When it came time for the company to do a full 409A valuation, our clean records saved the lawyers hundreds of hours and the company tens of thousands of dollars.
The Exit Waterfall: When a company is acquired, the cap table becomes an "exit waterfall." It models exactly how the proceeds flow down, from the investors with the highest liquidation preference to the common stockholders and option holders. We build this model from day one. It shows us our potential return, but more importantly, it shows the founders and employees what they stand to make. It keeps everyone aligned.
My Strongest Opinion on Cap Tables
If you are a founder, you need to know your cap table better than anyone. Better than your lawyers, better than your investors. Don't outsource this understanding. Build it yourself. Update it yourself. Model the scenarios yourself.
The cap table is the story of your company. It shows your past, defines your present, and predicts your future. Don't let it be a document you only look at when you're forced to. Use it as a strategic weapon. It might just be the most important document in your entire company.
Frequently Asked Questions
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.