Share certificates vs stock options on the cap table
Issued shares and option grants are different economic positions. Here is how to keep them straight for investors, counsel, and your next financing.
What a share certificate represents
A share certificate (or its electronic equivalent) documents that a specific number of issued and outstanding shares are registered to a holder. On the cap table, that usually appears as direct ownership of common or preferred stock, often with vesting restrictions recorded separately in a plan or agreement.
What a stock option is before exercise
An option is a right to buy shares in the future at a set exercise price. Until exercise, the holder is typically not on the cap table as a shareholder; you track granted, vested, and unvested options against an authorized pool.
After exercise
When someone exercises, they become a shareholder. The cap table should move the position from options outstanding to shares held, with a clear trail from grant to exercise so ownership reconciles with your corporate records.
409A and fair market value
CapTableFree does not perform 409A valuations. Option grants need a defensible fair market value from a qualified provider. We help you keep grants, exercises, and issued shares organized and export-ready so appraisers and counsel can work from one source of truth.
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