Every so often, you will have someone ask you about your “capital structure”. This is a listing–generally provided in a table–that shows:
- What types (or “classes” in finance-speak) of shares the Company can issue. We will talk about share “classes” another time.
- How many shares have been issued to shareholders already
- How many shares you have committed to issue in the future. You would be committed to issue shares if you give options or warrants to purchase shares to someone. If that person comes to you tomorrow, waving a wad of cash and declaring that they must, but MUST, have those shares, you want to be ready to hand some over.
The capital structure tables look like this: