A capitalization table, or cap table, records who owns what in a company: shares, options, convertible notes, and the percentage each holder controls once everything converts. Most cap tables live in spreadsheets. Most cap-table disputes begin the day the spreadsheet and the legal record stop agreeing with each other.
What a cap table records
A working cap table answers four questions for every holder: which instrument they hold, how many units, at what price they entered, and what percentage of the company they own. It shows two views. The issued view counts only existing shares. The fully diluted view assumes every option, warrant and convertible turns into shares, and that is the view investors negotiate on.
The table is not an internal note. Every financing round, every option grant and every exit waterfall is priced on it. If the table is wrong, the price is wrong, and someone pays the difference. Convertible instruments deserve their own block, with cap, discount and interest stated per note, because they are where models diverge first. Treat the cap table with the discipline of a financial statement, because in a negotiation it functions as one.
Where cap tables break
| Failure mode | How it happens | What it costs |
|---|---|---|
| Version drift | Founders, lawyers and investors each maintain their own copy | Weeks of reconciliation in due diligence |
| Unrecorded promises | Verbal option grants and side letters never reach the file | Disputes surfacing at the worst moment, usually an exit |
| Convertible ambiguity | Caps and discounts modelled differently by each party | The round reprices during closing |
| Stale corporate actions | Transfers or capital increases executed but never entered | The table contradicts the company registry |
| Formula errors | One broken cell in a dilution model | Percentages that do not add up to 100 |
The common thread is duplication. Every failure above is a copy diverging from a source. The criterion is blunt: if two documents claim to describe your ownership and they disagree, you do not have a cap table, you have two opinions.
The spreadsheet is not the register
Legally, ownership does not live in the spreadsheet. For a Spanish company it lives in notarial deeds, corporate books and, for tokenized securities, the statutory register described below. The spreadsheet is a summary of those documents, updated by hand, and every manual step between the legal act and the file is a chance for the copy to drift from the source.
The failure is structural, not a matter of care. Spreadsheets were designed for modelling, and a model tolerates drafts, copies and what-if versions. A register tolerates none of that. Asking one file to be both the sandbox and the record is how disciplined teams still end up with two versions of the truth.
The action that follows: reconcile the spreadsheet against source documents before any round, audit or exit, and record who signed off and when. The exercise is tedious once and expensive when skipped.
Tokenized equity: the register becomes the source of truth
Tokenized equity changes the architecture instead of patching the copy. The securities are issued directly on a distributed ledger, and the ledger entry is the legal record of ownership rather than a mirror of it. Spain admits this form of representation in its securities-markets law and assigns the register to an ERIR, the entity responsible for recording and registering tokenized securities. Think of the ERIR as the digital notary of the register (Ley 6/2023, art. 8; BOE). Royal Decree 814/2023 develops the regime (BOE). The first ERIR, URSUS-3 Capital, A.V., was authorised in November 2024.
The consequence for the cap table is structural. Transfers settle on the register itself, so the table stops being a document that someone maintains and becomes a query that anyone entitled can run. There is one record, it is current by construction, and dilution maths runs on data instead of on memory. What a security token is, and the full path to issuing one, are covered in our guide on how to issue a security token in Spain.
Honest limits
Tokenization does not repair bad history. Migrating a cap table onto a ledger starts with the same reconciliation you were avoiding, because the register can only be as clean as its opening balance. Legal structuring also matters: not every corporate form can issue negotiable securities directly, so some issuers reach the ledger through bonds, notes or a dedicated vehicle rather than through their existing share classes. And a single source of truth still needs governance for investor onboarding, lost credentials and error correction, handled in Spain through the ERIR and its procedures.
The criterion: tokenize to prevent future drift, not to erase past negligence. The past has to be cleaned by hand either way.
When to move
Three situations justify the change. First, you are raising from many investors and expect the holder list to keep growing. Second, you plan secondary transfers, where every trade would otherwise mean a manual update and a signature chase. Third, you have already paid for one painful due diligence and can price what drift costs. One of the three is enough to run the numbers. None of them means the decision is automatic: a company with three stable shareholders and no transfers in sight loses little by staying on paper.
A cap table that cannot drift is a register, not a spreadsheet. Run the 2-minute issuance assessment or request a proposal.
This content is educational. It is not legal, tax or investment advice. Always check the current version of each rule on BOE and EUR-Lex.
