# Equity

URL: /systems/equity · Id: `system:equity`

> Equity is the core System that keeps the cap table of each Company: shares, SAFEs, options and their holders, grants, vesting and conversions.

Equity keeps each [Company](/business/nouns/company)’s cap table: shares, SAFEs, options and their holders, with grants, vesting and conversions. [Agents](/business/nouns/agent) model rounds and draft the paperwork; a [Human](/business/nouns/human) approves every issue of securities.

## Summary
| Part | This System |
| --- | --- |
| Group | Legal and corporate |
| Status | Beta: it works, and its Verbs may still change |
| Shelf | Front: offered from a Startup’s first days |

You can ask:

- “Show me the cap table”
- “Grant this hire 10,000 options over four years”
- “Convert the SAFEs”
- “Who owns what after this round?”

## What you get
| Part | This System |
| --- | --- |
| Starts | On for every Startup at creation, with nothing to install. |
| Built from | [Database](/code/platform/capabilities/database), [Event streams](/code/platform/event-streams), [Workflows](/code/platform/workflows), [Securities filings](/business/glossary), [Common stock valuation](/systems/legal-and-corporate/valuation-409a) |

## Nouns it owns
| Noun | Definition |
| --- | --- |
| [Share](/business/nouns/share) | A Share is a unit of ownership in a Company, of one class, held by one Holder. |
| [Instrument](/business/nouns/instrument) | An Instrument is a right to future ownership in a Company: a SAFE, a note, an option or a warrant. |
| [Holder](/business/nouns/holder) | A Holder is the Party that holds a Share or an Instrument on a Company’s cap table. |

## Verbs
| Verb | Object | Approval | Event |
| --- | --- | --- | --- |
| [Share.issue](/business/nouns/share/issue) | [Share](/business/nouns/share) | Asks first; waits 1 business day | [`Share.issued`](/business/events/Share.issued) |
| [Share.transfer](/business/nouns/share/transfer) | [Share](/business/nouns/share) | Asks first; waits 1 business hour | [`Share.transferred`](/business/events/Share.transferred) |
| [Instrument.grant](/business/nouns/instrument/grant) | [Instrument](/business/nouns/instrument) | Asks first; waits 1 business hour | [`Instrument.granted`](/business/events/Instrument.granted) |
| [Instrument.convert](/business/nouns/instrument/convert) | [Instrument](/business/nouns/instrument) | Asks first; waits 1 business day | [`Instrument.converted`](/business/events/Instrument.converted) |
| [Instrument.exercise](/business/nouns/instrument/exercise) | [Instrument](/business/nouns/instrument) | Asks first; waits 1 business hour | [`Instrument.exercised`](/business/events/Instrument.exercised) |
| [Instrument.cancel](/business/nouns/instrument/cancel) | [Instrument](/business/nouns/instrument) | Asks first; waits 1 business hour | [`Instrument.canceled`](/business/events/Instrument.canceled) |

## Events
| Direction | Event | How |
| --- | --- | --- |
| Emits | [`Share.issued`](/business/events/Share.issued) | By [Share.issue](/business/nouns/share/issue) |
| Emits | [`Share.transferred`](/business/events/Share.transferred) | By [Share.transfer](/business/nouns/share/transfer) |
| Emits | [`Instrument.granted`](/business/events/Instrument.granted) | By [Instrument.grant](/business/nouns/instrument/grant) |
| Emits | [`Instrument.converted`](/business/events/Instrument.converted) | By [Instrument.convert](/business/nouns/instrument/convert) |
| Emits | [`Instrument.exercised`](/business/events/Instrument.exercised) | By [Instrument.exercise](/business/nouns/instrument/exercise) |
| Emits | [`Instrument.canceled`](/business/events/Instrument.canceled) | By [Instrument.cancel](/business/nouns/instrument/cancel) |

## States
The lifecycle of an [Instrument](/business/nouns/instrument):

| State | Meaning | Moves to |
| --- | --- | --- |
| `outstanding` (first) | Granted or issued and not yet turned into Shares. | `converted` by [Instrument.convert](/business/nouns/instrument/convert); `exercised` by [Instrument.exercise](/business/nouns/instrument/exercise); `canceled` by [Instrument.cancel](/business/nouns/instrument/cancel) |
| `converted` | A SAFE or note turned into Shares at a priced round. | None: it ends here. |
| `exercised` | Every Share it covers was bought at the strike price; a partial exercise keeps it outstanding. | None: it ends here. |
| `canceled` | Ended unvested, expired or forfeited, with any option Shares back in the pool. | None: it ends here. |

## Who operates it
| Part | This System |
| --- | --- |
| Accountable | [Founder](/agents/founding/founder) |
| Team | [Founding Team](/agents/founding) |
| Seat | A role agent holds it until a Human is seated. |
| Autonomy | `assist` |
| Also calls its Verbs | [Legal Lead](/agents/legal/legal-lead) |

## Approvals and limits
| Verb | Rule | Detail |
| --- | --- | --- |
| [Share.issue](/business/nouns/share/issue) | A person says yes first | Waits 1 business day |
| [Share.transfer](/business/nouns/share/transfer) | A person says yes first | Waits 1 business hour |
| [Instrument.grant](/business/nouns/instrument/grant) | A person says yes first | Waits 1 business hour |
| [Instrument.convert](/business/nouns/instrument/convert) | A person says yes first | Waits 1 business day |
| [Instrument.exercise](/business/nouns/instrument/exercise) | A person says yes first | Waits 1 business hour |
| [Instrument.cancel](/business/nouns/instrument/cancel) | A person says yes first | Waits 1 business hour |

## Processes that use it
| Process | How it uses it |
| --- | --- |
| [Incorporation](/workflows/processes/incorporation) | A step calls [Share.issue](/business/nouns/share/issue) |

## Rail underneath
| Capability | Runs on |
| --- | --- |
| [Securities filings](/business/glossary) | filings.legal |

## Views and dashboards
| View | Shows | Metrics |
| --- | --- | --- |
| Cap table | Every Holder’s Shares and Instruments, fully diluted. | None. |
| The [Founder](/agents/founding/founder)’s view | The Metrics its accountable Role answers for. | [Outside revenue](/agents/founding#outside-revenue), [Outside paying Customers](/agents/founding#outside-paying-customers), [Days to first outside Order](/agents/founding#days-to-first-outside-order), [Payment asks](/agents/founding#payment-asks), [Problem interviews](/agents/founding#problem-interviews), [Committed ICP members](/agents/founding#committed-icp-members), [Weekly outside revenue growth](/agents/founding#weekly-outside-revenue-growth), [Default alive](/agents/founding#default-alive), [Human hours per $1k outside revenue](/agents/founding#human-hours) |

## Access
What each Access level may call here.

| Access level | May call |
| --- | --- |
| `owner` | Every Verb (14) |
| `admin` | All but 6 of 14: `Instrument.cancel`, `Instrument.convert`, `Instrument.exercise`, `Instrument.grant`, `Share.issue`, `Share.transfer` |
| `member` | All but 6 of 14: `Instrument.cancel`, `Instrument.convert`, `Instrument.exercise`, `Instrument.grant`, `Share.issue`, `Share.transfer` |
| `viewer` | Read only (6 of 14) |

## Import and export
None.

## Fees and pricing
None.

## Availability and limits
| Part | This System |
| --- | --- |
| Status | Beta: it works, and its Verbs may still change |

## Compliance notes
Every grant and transfer follows a board Decision recorded in Corporate records; the round terms stay the founder’s.

Controls it carries:

- [Log completeness](/systems/trust-and-governance/controls/log-completeness)
- [Append-only records](/systems/trust-and-governance/controls/append-only-records)
- [Point-in-time recovery](/systems/trust-and-governance/controls/point-in-time-recovery)
- [Processing definitions](/systems/trust-and-governance/controls/processing-definitions)
- [Action completion](/systems/trust-and-governance/controls/action-completion)

## Related Systems
- [Corporate records](/systems/corporate-records)
- [Agreements](/systems/agreements)

## Example
A [Services-as-Software](/products/templates/services-as-software) [Startup](/business/nouns/startup) adds a cofounder with 20% on four-year vesting, then raises a $250,000 SAFE at an $8 million cap. Equity models the conversion at the next round and shows both founders their fully diluted stakes. It records each grant once the board approves it.