How to Track a Capitalization Representation

How to track a capitalization representation is an equity-stack ledger from signing through bring-down and indemnity notices, not another option-pool or angel cap-table how-to. For each signed deal, log whether a capitalization representation is present or silent, which equity classes and outstanding securities are scheduled, whether the rep is treated as fundamental, whether it is carved out of the general indemnity cap and basket, how it overlaps with authorization and subsidiaries reps, and status. Raziel's indemnity cap tracking page is the dollar ceiling. This page is the capitalization representation and whether it sits outside that ceiling.

This is not legal, tax, insurance, or investment advice. Raziel does not provide it. Copy the capitalization sentence and schedule from the PDF. Do not invent a 2025 Study percentage for capitalization-rep presence when public recaps do not publish one, and do not paste older carve-out prints onto a silent deal.

What this ledger is (and is not)

A capitalization representation states the authorized and outstanding equity of the target (and often options, warrants, convertibles, and promised securities), usually with a schedule. Buyers treat it as a core ownership promise: if the stack is wrong, the buyer did not buy what it thought it bought. Public 2025 ABA Study recaps (K&L Gates, Business Law Today, Goulston May 6, 2026) do not publish a percentage for capitalization-representation inclusion in the free write-ups cited here. Do not invent one. What is published for related treatment: Morse Law, What's Market: Indemnification Caps and Baskets (September 25, 2024), summarizing the ABA Private Target M&A Deal Points Study covering transactions from full-year 2022 and Q1 2023, reports that deals with indemnification caps included a carve-out for capitalization representations in 59% of those deals, and deals with baskets included a capitalization carve-out in 61%. Those are carve-out prints among capped / basketed deals, not a presence percentage for the rep itself. Keep them labeled. The ABA 2025 Study sample frame (K&L Gates / Business Law Today) is 139 agreements, $25M to $900M (majority under $200M), 42 simultaneous / 97 deferred. Those are study snapshots. Your capitalization schedule and indemnity article control.

This ledger is not option-pool-refresh tracking (how the pool is topped up in a financing), not startup-cap-table-for-angels (founder portfolio hygiene), and not indemnity-cap tracking (the general dollar ceiling). Cap and basket dollars stay on those pages. This row is the capitalization text, the schedule of securities, and whether the paper carves that rep out of the general limits.

Seven columns on one row

Open one row per signed deal. Attach the capitalization schedule, the fundamental-reps list (if any), and pointers to the indemnity cap and basket rows.

• Present or silent. Capitalization representation present, or silent. Do not invent a 2025 Study presence percentage. Public K&L Gates / BLT / Goulston 2025 recaps do not publish one for this rep. Copy presence from your PDF.

• Equity classes and outstanding securities scheduled. Copy authorized vs outstanding for each class, plus options, warrants, convertibles, SAFEs, and promised issuances listed on the schedule. A clean schedule is a different book than a prose-only rep.

• Fundamental yes/no. Mark whether the paper lists capitalization among fundamental representations (often with longer survival and higher or no cap). Copy the list. Do not invent fundamental treatment.

• Cap carve-out yes/no. Morse (Sept 25, 2024) citing ABA 2022/Q1 2023: capitalization carve-out from the indemnification cap in 59% of deals with caps. Copy whether your PDF carves capitalization out of the general cap. Do not paste 59% onto a deal that keeps capitalization inside the general cap.

• Basket carve-out yes/no. Morse: capitalization carve-out from the basket in 61% of deals with baskets. Copy yes, no, or silent. Keep basket structure dollars on the basket page.

• Overlap with authorization / subsidiaries. Pointer only. Morse also prints due-authority (73% cap / 79% basket) and due-organization (74% / 74%) carve-outs as context. Do not rewrite those pages. Note only whether your capitalization row cross-references them.

• Status. Copied, bring-down delivered, claim noticed, disputed, settled, or closed. When a claim cites missing shares or phantom options, book the date and schedule line.

Copy the clause, not the study percentage

Do not invent a 2025 ABA Study percentage for capitalization-rep presence. Do not paste Morse's 59% cap carve-out or 61% basket carve-out onto a deal that keeps capitalization inside the general limits. Do not fold this row into option-pool-refresh tracking, startup-cap-table-for-angels, or indemnity-cap tracking. Option-pool refresh is a financing mechanic. The angel cap-table page is portfolio hygiene. The indemnity-cap page is the dollar ceiling (pointer only). This page is the capitalization promise, the securities schedule, and whether that promise sits outside the general stack.

When a post-close ownership fight arrives, log the schedule line that was wrong, whether the rep was fundamental, and whether cap or basket carve-outs applied. That trail is what indemnity counsel will ask for before any ownership dispute.

When the ledger holds

The row holds if the seven cells are copied from the PDFs (or marked missing). It fails when you invent a capitalization rep, invent a 2025 presence percentage, invent a fundamental or carve-out election, or treat the option-pool or indemnity-cap tab as if it answered the capitalization question. Raziel's alternative asset dashboard is where the capitalization sentence, the securities schedule, and any claim notice should sit together. Raziel does not decide your capitalization dispute. Copy the seven columns.