Voting and Approvals

How to read a cap table for governance, not just dilution

A cap table is also a control map

Most cap-table content treats the cap table as a dilution model. It is also a record of who can approve what. The same row that tells you an investor owns 12% also tells you whether they can block a certificate amendment, force a conversion, or stop a sale.

Modeling rounds without modeling control is half the picture. The decision rules that govern a round (who has to vote yes, who can block) sit on top of the same share counts and seniority that drive dilution and exit proceeds.

Where the rules come from

Three documents typically govern voting on a venture-backed company.

Certificate of Incorporation. Defines share classes, conversion rights, anti-dilution, and the protective provisions held by each preferred class. Class votes (e.g. a majority of Series A voting separately) live here.
Stockholders' Agreement (or Voting Agreement). Drag-along, board composition, and election obligations.
Investors' Rights Agreement. Information rights, registration rights, and pro-rata rights for Major Investors.

Delaware default rules from the General Corporation Law fill any gap. Each share of capital stock gets one vote on matters submitted to stockholders, unless the Certificate of Incorporation says otherwise.

Common approval thresholds

Most decisions on a venture-backed cap table fall into one of these categories.

Majority of capital stock voting together. Common and preferred (on an as-converted basis) voting as a single class. Used for director elections (subject to any class-specific seats), most ordinary matters.
Majority of preferred, voting as a class. Required for certificate amendments that affect preferred rights, authorizing senior or pari passu securities, increasing the size of an existing series, certain redemptions and dividends.
Majority of a specific series. Some protective provisions are series-specific. A new Series B may not be able to amend the rights of Series A without Series A's separate consent.
Majority of Major Investors. Waiving pro-rata rights typically only requires the holders of a majority of the registrable securities held by Major Investors, not all preferred. See Pro-rata rights and Major Investors for how Major Investor status is defined.
Supermajority thresholds. Two-thirds, sometimes higher, used for the most consequential approvals (sale of the company, drag-along consent in some structures).

The thresholds are negotiable. Read the Certificate of Incorporation; templates are routinely modified.

Modeling votes on the cap table

The mechanics are simple once you have the share counts. A voting tracker is not prebuilt into the Cap Table and Exit Waterfall Tool but it is easy to add additional columns to track, for example:

Voting. Easy to add a dropdown column for each holder after the fully-diluted column to track voting rights, and voting rights by class. Add a helper data validation so the values are Y or N (Yes or No) and use that to validate whether the shares have voting rights.
Ownership by Class. Additional columns after the fully-diluted Common, Series A, Series B, etc. can be used to show voting rights by share class.
Major Investor (Y/N). Add a column for a tag or a validation based on the definition of a major investor threshold defined in the Investors' Rights Agreement.

What this is good for

Two practical uses.

Pre-round approvals. Before a financing closes, the company typically needs to amend its Certificate of Incorporation, sometimes increase authorized shares, sometimes authorize a new series. Walk through each required vote on the cap table to confirm the votes are there. A holder who declines to consent is a different problem from a holder who never replies; the model surfaces the gap.
Sale approvals and drag-along scenarios. When a sale comes up, the same cap table tells you whether the threshold for drag-along applies and which holders need to be brought along voluntarily.

How the Cap Table and Exit Waterfall Tool handles this

The free Cap Table and Exit Waterfall Tool does not ship a prebuilt voting tracker, but the column structure on the pre-distribution cap table accommodates it cleanly. Add a Voting column to the right of the share-count columns, add a Major Investor column on each preferred row, and add a small block of formulas at the bottom to summarize each threshold. The class column is already there.

Vote tracking is governance, not economics, so it sits alongside the rest of the cap table without changing dilution or exit math. Use it as a working sheet during a round, then archive a snapshot once approvals are secured.

Where this lives in your legal docs

Voting thresholds and class-vote rules are in the Certificate of Incorporation. Drag-along, board seats, and election agreements are in the Stockholders' Agreement (or Voting Agreement). Pro-rata waivers and Major Investor definitions are in the Investors' Rights Agreement. The NVCA model documents are the canonical templates; most law firms start there and modify.