THE GAP TABLE
Our experience working in the tech industry as well as backing over 100 companies has given us a unique purview and insight into this: the roadmap to power in Silicon Valley runs through the cap table.
The cap table, or capitalization table, records ownership of equity in startups, and the outsized outcomes which get chronicled in Silicon Valley are all a result of this compensation - not salary or cash bonuses.
We observed that much of the conversation on gender equality in our industry focused on workforce representation - how many women or members of other underrepresented groups were hired within companies, into leadership roles, and onto boards. Representation is critically important for a whole host of reasons, but our hunch was that the ownership structure of companies was a critical next piece of the diversity and inclusion conversation. All of the big windfalls and meaningful outcomes in Silicon Valley all trace back to equity and this ownership structure.
Why does this matter? Because the wealth created from successful startups enables risk-taking which is shaping the future of Silicon Valley and beyond. People who participate in this upside can more easily take future risks, like starting companies and venture capital firms, deciding which ideas get backed as an investor, joining companies early when cash comp is low and equity grants are large. The impacts go even further—to philanthropy, politics, and society at large.
When it came to compensation, the most forward-leaning companies often conducted analysis only looking at salary - ignoring the fact that equity comprised the biggest potential for career- and life-changing wealth which enables people to go on to take greater risks in their careers.
We posted about this phenomenon - which we coined The Gap Table - in February 2018, and partnered with Carta to release the first known study to measure the gap in September 2018.
Read the full study via the links above, or the more recent update to this analysis by Carta at tablestakes.com.