The best cap table management software for startups

So you're looking for the best cap table management software? Let's see, you're either finally ready to ditch the spreadsheets and get your cap table in order, or you're unhappy with your current cap table software and looking for better alternatives. We got you. We're glad you landed on this page.

As a startup ourselves, we know how crucial it is to have a simple, automated cap table to manage your startup's equity. Between the legalese, valuation, and complicated cap table math, cap table management can be daunting. In the same way, choosing the right software can be tricky.

That's where this guide comes in. We'll walk you through cap table basics, top tools on the market, and how to choose the right one for your needs. Ready to whip your cap table into shape? Read on to learn how to find the solution that's just right for your startup.

Startup cap table

We all have our origin stories. Maybe you're a startup founder and you wrote down your first cap table on a paper napkin or the back of a receipt. At some point, you took that cap table napkin out of your back pocket, pulled up a spreadsheet, and made it official by recording your (and likely your co-founder's) first investments. Eventually, you added a row for your first investors (likely your family and friends) and your first employees.

That's just about as basic as your cap table creation can get! As soon as you start raising funds and adding more shareholders, a cap table management software has to be a part of your startup's story.

In fact, you find out immediately that your cap table software is crucial to your growth from that point onwards — from raising funds, updating investors, and issuing advisory shares and equity grants.

From spreadsheets to cap table software

When do you get your cap table out of a spreadsheet and into a cap table software?

Having a spreadsheet-based cap table is still common among smaller companies. Just to be clear, we are not against spreadsheets! If you're an excel whiz, things like cap table modelling and pre forma cap tables can be done with some spreadsheet magic.

Here at Cake, we even provide the ability for Cake users to download their cap tables into a .csv file that they can convert into a spreadsheet for whatever purpose it may serve at any given moment.

However, you do need a single source of truth that you can always refer back to. Especially for dynamic equity-related transactions, you want the most updated data stored and accessible in one place.

With that said, we've seen startups move into a cap table software as soon as they start granting stock options to employees or engaging with angel investors.This is because the spreadsheet approach does not scale and often leads to errors and version control issues. Cap table management software is built specifically for equity management and handles things like:

• Issuing stock certificates and tracking ownership
• Modeling dilution from funding rounds
• Calculating fully diluted shares outstanding
• Managing shareholder information like contact details and vesting schedules
• Providing audit trails and version control

Cap table and equity management can become complex and expensive quite quickly, especially when you factor in legal fees. A reliable cap table software can be a lifesaver at a time when you need your energy and resources directed to hiring employees, developing your product, or growing your business.

Why do you need a cap table software

When choosing a cap table management software, you need to start with your WHY. Each startup has unique contexts and business objectives. Knowing what's important to your business now and in the future will help you choose the right tools that will scale with you. Here are some of the most common use cases for cap tables.

Get better terms when raising funds

Growing a business usually requires several financing rounds, and in every round of investment, a shareholder's ownership is affected or diluted. Negotiating the terms of these investment agreements is more efficient when the startup has a clean and updated cap table in place. Besides, not having an organized cap table management system might impact your ability to attract additional investment in the first place.

Simplify issuing stock options

Setting up a stock option pool is also common among startups, whether it's granting company equity to startup advisors and first hired employees. Stock options vest over time, and keeping track of these for each round of option grants is another use case for your cap table. There are heaps of equity-related information involved such as repurchases, transfers, early exercises, restricted stock, and so on. A good cap table processes these information efficiently and accurately.

Ensure compliance

Tax compliance and regulation are another two important aspects of cap table management. If your company uses a spreadsheet for a cap table, you could spend hours figuring out what information needs to go where when it comes to submitting tax forms.

Enable hiring of key employees

Equity compensation is an excellent way for startups that don't have the cash (yet) to attract the best talent. Employee stock option plans are a norm in the tech startup space and you want to consider setting this up this early on. Designing and implementing compensation packages is simplified when you have a cap table that provides detailed information about each employee's equity agreement.

Expand globally

Are you planning to take your business global? Whether you dream of establishing a global presence or you're thinking about hiring a global team, you need a software that takes internationalization into consideration. Cap tables and equity management go hand-in-hand. The best cap table management is one that does that capitalization work for you while also automating processes such as issuing shareholder agreements that comply with country-specific laws and taxations.

Criteria

Choosing the right cap table management software

What are the things to consider when choosing the right cap table software?

User-friendly and intuitive interface

Usability and the overall user experience should be at the top of mind of every modern software. Your cap table should be making your life easier and removing the unnecessary busywork, not causing you headaches. Choose a software with an intuitive user interface that's easily learnable or "figureoutable", efficient, and ease to use.

A user-friendly interface can save you time and resources when setting up and managing your cap table. You also want a platform that allows you to give your team (employees, advisors, shareholders) easy access to features that are valuable to them. Some startups bring along their lawyers to set up and review their cap table for them, so you want a cap table that your legal team can navigate with ease as well.

Affordability and transparent pricing

The cost of a cap table is an important consideration for cashflow-challenged startups. Most early stage companies that need this kind of technology are still getting ready to raise if not in the middle of their engaged in funding rounds while they direct cash towards growth.

The best cap table softwares are free to test run, and have transparent and tiered pricing where you don't pay for features you don't need just yet. Only when you're ready to add more stakeholders or features that you pay for higher or custom packages. You'd be surprised at how many startup founders talk about how they were unknowingly charged more than what they expected when they signed up. You don't have to pay for complex features in the early stages, find a cap table software that

Digital functionality

Ensure that the software offers all the features you need to manage your cap table effectively. This may include the ability to track various types of securities (e.g., common stock, preferred stock, options), manage SAFEs and other convertible securities, handle different types of equity events (e.g., funding rounds), model scenarios, and manage stakeholders.

Gone are the days where legal documents are printed on paper and stored away in metal file cabinets. While this is a no-brainer, it's important to call out that you want your cap table to have all the important digital functionalities needed in today's startup environment. Functionalities like mobile accessibility, electronic signatures, real time updates.

A lot of stake holders will be accessing your cap table software from different parts of the world, in different timezones, so you want it accessible 24/7.

Modeling, reporting, compliance

What each startup needs from their cap table management software differs from company to company. Along with a user-friendly interface and intuitive design, the best cap table management software provides tools that make generating recurring reports easy. Built-in features that make complying with different tax laws are also important. The software also needs to be compatible with any device so that sharing information when necessary is possible.

Global focus

In today's digital, post-pandemic world, work is more globalized than it's ever been. A lot of equity management and cap table management tools are focused on specific countries or regions, which can be limiting for companies with remote workers or those that want to open up their hiring pool to talent from around the world. Complying to country-specific taxation, for example, is important when issuing stock options to an employee outside of your base country.

The best cap table management software covers this for you, leaving you one one less thing to worry about, so you can focus on actually running your business.

Carta alternatives

Carta is also intended for enterprise use, which makes it complex and expensive for startups. While it boasts of robust features, a common complaint we see are its lacklustre customer support, slow onboarding, and pricing issues.

But the cap table industry is thriving! Over the past years, there have been a growing number of Carta alternatives that are worth your consideration. Whether you're building your first cap table or you're unhappy with your current cap table software, you're in the right place.

See what others are saying about Cake Equity in comparison to Carta here.

If you're in the market looking for the best cap table management software, we curated a list to help your search, assessing each one against these top 3 criteria: Ease of use, global focus, and affordability.

Top cap table softwares for startups

Pulley

• Ease of use: Straightforward and easy-to-use, with helpful features like a built-in equity calculator to convert percentages to monetary amounts.
• Global focus: Only available in the US
• Affordability: Free trial period up to 25 stakeholders, paid subscription plans range from $1200-$3500 per year

SeedLegals

• Ease of use: Straight-forward with self-onboarding
• Global focus: Focus on the UK
• Affordability: 7-day free trial available, up to £999 in annual fee upfront

Capdesk

• ‍Ease of use: More complex, with onboarding process that requires booking a demo and speaking to sales before getting started.‍
• Global focus: Only available in the EU‍
• Affordability: No free trial, pricing not easily available; they need to gather personal/company details to quote.

Vested

• Ease of use: Requires talking to sales to get started. More complex and time-consuming to set up.
• Global focus: Only available in the UK
• Affordability: 3 pricing tiers ranging from £1,620-£3,780 for the first 10 scheme members, increasing as you add more

Astrella

• ‍Ease of use: Quick setup and automates cap table based on provided data.‍
• Global focus: Based in the US but has a global presence.‍
• Affordability: free trial for 30 days, afterwards $5-$10 per month per stakeholder

Trica equity

• ‍Ease of use: Quick setup with support‍
• Global focus: Has established markets in India, Singapore, and US‍
• Affordability: Free up to 10 stakeholders, Plans vary according to location, pricing ranges from approximately $740- $4,880

Ledgy

• ‍Ease of use: Simple to use‍
• Global focus: Based in Europe but has global presence
• ‍Affordability: Free up to 25 stakeholders; pricing ranges from $200-$600 per month

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Customer love

What cap table experts are saying about Cake

The short and sweet of that is the cap table that we use in Cake is our source of truth. That's the tool that we use on a day-to-day basis to update it as we're adding new employees to Vow.

At Vow, every employee receives an option grant. Because of that, we need a tool like Cake where you can dynamically update the vesting. At any point in time for the fundraising process, you're going to have an investor reach out and say, what's the cap table look like today? And what's the exact amount of shares that have been vested within your ESOP pool?

So Cake becomes a very easy one-stop shop where we can go and because we have the day-to-day processes in place where that's updated, then we can very easily go and download what the cap table looks like.
^{—Ellen Dinsmoor, COO of Vow}

We spent thousands and thousands of dollars on lawyers to keep all this information current in the last system and that was just on top of how much it already costs for just the subscription of the last system. It's so much easier to do it on Cake.
^{—Rachel Obenshain, President & Co-founder of Xeni}

Read more Cake Equity customer reviews.

Quick-fire Q&A

Cap table software FAQs

What features should I look for in cap table software?

When evaluating cap table software options, there are several features you should look for to ensure that the tool meets your company's needs. Three important considerations are: ease of use, global-focus, and affordability. Cap table software are typically bundled with other tools like equity management and can therefore be costly. You want a cap table software that meets your startup requirements and budget, and will scale with you as you grow.

How much does cap table software cost?

The cost of cap table software varies depending on specific features you need and number of users. Some cap table software solutions charge a flat monthly fee, while others charge based on the number of stakeholders, the number of equity types, or the number of transactions. Here are three factors that can influence the cost of cap table software:

• Company size: Larger companies with more stakeholders and equity types will typically pay more for cap table software.
• Advanced features: Cap table software with advanced reporting, customization, and integration features may come at a higher cost.
• Support and services: Some cap table software vendors offer additional support and services such as legal assistance, tax reporting, and regulatory compliance, which can increase the overall cost.

How do I choose the right cap table software?

Choosing the right cap table software can be challenging, but there are several factors you can consider to ensure that you select a tool that meets your company's needs. Here are three tips for choosing the right cap table software:

• Define your requirements: Before evaluating cap table software options, define your company's specific needs and requirements for equity management.
• Evaluate multiple options: Research and evaluate multiple cap table software options to determine which tool offers the features and pricing that best align with your needs.
• Consider scalability: Choose a cap table software solution that can scale with your business as it grows, ensuring that the tool can continue to meet your company's needs in the future.

A cap table management software is an essential tool for startups looking to grow their businesses. It simplifies equity management, ensures compliance, and enables you to expand globally. When choosing a cap table management software, consider factors such as ease of use, reporting capabilities, and cost. With the right cap table management software, you can focus on what matters most—growing your business.