Knowledge
Why the tools built for VC-backed startups don't fit private equity — and what a PE fund's cap table actually has to do.
Last updated 4 July 2026
In brief: Startup cap table tools are built to model one company's equity — funding rounds, option pools, SAFEs and dilution. Private equity needs something different: a multi-level holding structure, many portfolio companies per fund, interest-bearing instruments that accrue over the hold, look-through ownership from LP to operating company, and an exit waterfall. The two problems only look similar on the surface.
The well-known cap table products grew up serving venture-backed startups. Their model is a single company raising successive rounds of equity. They are very good at the things that matter in that world:
For a startup, that is exactly the right toolkit. For a private equity fund, it solves the wrong problem.
A private equity fund does not own one company through one class of shares. It owns many portfolio companies, each through a chain of holding entities, using a mix of equity and debt instruments that accrue value over time. The requirements are structurally different:
| Requirement | Startup tool | PE needs |
|---|---|---|
| Scope | One company | Many portcos per fund, many funds |
| Structure | Flat share register | Multi-level holding chain (Fund → SPV → TopCo → OpCo) |
| Instruments | Equity, options, SAFEs | Ordinary + preference shares + shareholder loans |
| Time value | Static until next round | Interest accrues daily on prefs and loans |
| Ownership | Direct % | Look-through from LP to OpCo |
| Currency | Single | Fund-level reporting currency across a multi-currency portfolio |
| Exit | Pro-rata by class | Waterfall through debt, prefs, then ordinaries |
The single largest mismatch is instruments. A startup's value is almost entirely in equity. A PE structure's value is split across an institutional strip of preference shares and shareholder loans that accrue interest continuously throughout the hold. A tool with no concept of a coupon, a day-count basis or compounding cannot state the fund's true claim on any given date — and cannot produce an exit waterfall that pays the strip before the ordinaries.
The second gap is structure. Private equity ownership runs through layered holding entities, often across jurisdictions. Answering "what does this LP ultimately own of this operating company?" requires look-through across every layer — not a figure a flat share register can produce.
It is not a matter of features to bolt on. Interest accrual, holding structures and waterfalls are not add-ons to a startup cap table — they are a different data model. That is why PE firms so often fall back to Excel rather than a VC-era tool.
CapTab is built around the PE problem: a transaction register spanning the whole fund structure, instruments that accrue interest, look-through ownership and a waterfall at exit. If your ownership lives across holding companies and interest-bearing instruments rather than a single equity round, that shape is what you need — see how CapTab models it.