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Introducing the Cap Table and Hiring the CTO

Feld Thoughts

As Finance Fridays continues, we are introducing the concept of the Cap Table. This week they set out to create their cap table and hire a CTO. Rather, it gets recorded in a document called the Capitalization Table (or “Cap Table”), which shows the ownership stake each person or entity has in the business.

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Want to Know How VC’s Calculate Valuation Differently from Founders?

Both Sides of the Table

This states how the proceeds from a sale or dissolution of the company will be distributed. How VC’s Calculate Valuation : We walked through a standard deal where you raise $1 million at a $3 million pre-money valuation leading to a $4 million post money valuation.

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In 2017, GE Will Buy More Tech Startups Than Google

Hunter Walker

The total value of these deals might look higher than when a tech company makes an acquihire but the premium tends to go to retention rather than the cap table (especially since (a) the acquirer might not be seen as an ‘attractive’ place to work and (b) there’s assumption of less equity upside post-acquisition).

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Beware of ASSHOLE VCs

VC Adventure

First – they achieved a significantly better tax outcome on the distribution of proceeds. This helped them with a number of things. More importantly, this handily resulted in their ability to completely wipe out the common ownership in the business. That’s right. Aren’t there lawyers involved? How could they let this happen?

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Textio’s Founder Kieran Snyder on the Two Advantages Startups Have in AI (While Remaining Skeptical Of The Funding Gold Rush)

Hunter Walker

“Admirer from outside of the cap table” is how I approached Kieran Snyder , Cofounder of Textio. Like everyone else, we went distributed overnight in March 2020. That is to say, I DMed her on Twitter in 2016, impressed by the work she was doing but without a preexisting relationship.

Cofounder 127
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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

Flexible VCs also offer investors some of the same advantages as RBI: Clear return expectations : The return cap is a stated multiple of the investment, typically 2-5x. . Flexible VC creates early liquidity which can be either reinvested or distributed to LPs. Early liquidity. Equity VC is a “get rich slow” business.

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No Plan Survives First Contact With Customers – Business Plans versus Business Models

Steve Blank

Then they had a five-year P&L statement, balance sheet, cash flow and cap table. This includes how the product gets distributed to your customers and how money flows back into your company. It was an exquisitely crafted plan. Finally, they took the plan and boiled it down to 15 of the prettiest slides you ever saw.