The cap table is a spreadsheet businesses use to track who owns what percentage of a company. For example, if two people decided to start a restaurant, they would each own fifty percent. At this point, the cap table is very simple.
Let’s say the restaurant owners are so successful that they open multiple locations. They hire more employees and bring in new investors. The investors will expect shares in the company in return for their investment. The owners also put aside some of the available shares for new and existing employees. At this point, a rough outline of who owns what (saved in an email somewhere) won’t do the trick.