Version One Ventures

MAY 22, 2018

How do you decide who you should have in your cap table? Lastly, dig down into how an investor behaved during new financing rounds or during exits. The post The “reverse” pitch: Who should you have on your cap table? What is important to you? What reverse pitch resonated with you?

Cap Table 60

Cap Table Cofounder Syndicate Syndication 60

Berkonomics

FEBRUARY 27, 2020

When you seek professional investors, whether organized angels or venture capitalists, one of the early questions you are asked is “How have you financed the business so far?” How it happens. Investors love to see entrepreneurs who have used their own money to ignite their businesses.

Cap Table 62

Cap Table Private Placement SEC Accredited Investor 62

Both Sides of the Table

FEBRUARY 8, 2016

The terrible consequence is that some great companies struggle to get financed. If you need to clean up your own cap table first – while very hard to do – it will make outside funding easier. The best deals will continue to get financed. In my mind this simply means. Start early. Be realistic on valuation.

Burn Rate 150

Burn Rate Cap Table Balance Sheet Dilution 150

Both Sides of the Table

JULY 23, 2014

The “big boom” in startup financing started around March 2009?—?more Public-company tech investors creates competition in late-stage financings and these investors can afford to be less price sensitive if they choose. It’s hard to work out the cap table with your peers when one of them has no real intent in fixing the problem.

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

VC Adventure

OCTOBER 8, 2012

Given the prevalence of convertible debt as a seed financing instrument, an increasing number of companies we look at have some kind of convert in place. This is typically reflected on cap tables in a completely separate tab to the spreadsheet that shows the debt total by investor and then some kind of interest calculation.

Cap Table 93

Cap Table Dilution Equity Deal Structure 93

ithacaVC

SEPTEMBER 4, 2011

Here is the latest edition of Finance Fridays from Brad Feld called “Introducing the Cap Table and CTO” Every startup needs someone to be in charge of the Cap Table. That person is typically the inside finance person, but it does not really matter who so long is it is always current.

Cap Table 49

Cap Table Finance Option Pool Warrant 49

Hunter Walker

NOVEMBER 10, 2024

Whether it’s the multibillion dollar AUM VCs being able to go deeper and later into their companies, or new sources of capital (sovereign wealth, crossover funds, etc), the financings or tender offers relieve the pressure previous startups faced, and which the public markets could uniquely solve.

Cap Table 109

Cap Table Dilution Valuation .Net 109

Hunter Walker

MARCH 15, 2018

While reading Brotopia, we were also helping theSkimm finish up their new financing , with Google Ventures and Spanx founder Sara Blakely joining the cap table. Over the past five years, I’ve witnessed theSkimm be underestimated by the venture capital industry, by pundits and press.

Technical Review 73

Technical Review Cap Table Venture Capital Finance 73

Hunter Walker

JANUARY 2, 2017

This keeps them aligned with their investors since a $250m exit with modest venture financing raised can be wonderful for all parties, but the same transaction can look awful if your last round was $60m on $300m pre! OR, the team and/or investors will be ready to take their money off the table. Highest Level: Buying Peace of Mind .

Technical Review 119

Technical Review Cap Table Acquisition Startup 119

David Teten

JANUARY 19, 2021

Part of the magic of revenue-based financing is how historical performance and strong, achievable financial projections are ultimately the backbone of how RBI/RBF investment decisions are made.” Further reading: The Evolution of Entrepreneurial Finance: A New Typology. Inaccessible to great majority of early-stage companies.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

OnlyOnce

FEBRUARY 1, 2024

Why would the cap table of the target company agree to this? But think of it as a tool in the M&A/financing tool belt. That’s right, not only do you not have to put cash OUT for the deal, you’re getting additional cash IN. Think of it as a contemporary corporate version of the dowry.

Cap Table 71

Cap Table Common Stock Acquisition Stock 71

This is going to be BIG.

MAY 4, 2022

Morality aside, I’d say given the inherent riskiness of startups, I’m not sure this would be a great addition to your cap table. I’m a straight white dude who grew up in NYC and worked in finance. How about a Middle Eastern Prince that kills journalists (directly or through a Kushner)? Drug kingpin?

Cap Table 167

Cap Table Cofounder Private Equity Finance 167

Hunter Walker

SEPTEMBER 5, 2021

Startup CEOs Should Test Strength of Cap Table Every ~6 Months To Know Where They Stand. As a venture fund I might have a strategy which says “for every dollar I invest into companies, I will hold one dollar in reserve for additional financings.” Instead my recommendation is to ask every ~6 months or so in-between financings.

Cap Table 98

Cap Table Seed Stage Syndicate Syndication 98

View from Seed

SEPTEMBER 23, 2019

To provide relevant perspective, listing past convertible note(s) and/or equity financing(s) including total round size and valuation (caps) is helpful. Previous venture firms’ specific involvement on the cap table should be noted here, though. First, it’s helpful to enumerate the startup’s funding history to date.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

VC Adventure

OCTOBER 8, 2012

Given the prevalence of convertible debt as a seed financing instrument, an increasing number of companies we look at have some kind of convert in place. This is typically reflected on cap tables in a completely separate tab to the spreadsheet that shows the debt total by investor and then some kind of interest calculation.

Cap Table 48

Cap Table Dilution Equity Deal Structure 48

ReadWriteStart

SEPTEMBER 2, 2011

While certainly not every business needs to raise venture financing, it is the path for many high-growth technology startups. Remember, once you screw up your Cap Table it's really hard to go back. This can be an intimidating experience so I've put together a list of five tips for raising a venture round.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

OnlyOnce

JULY 30, 2020

Sometimes you can have a major internal problem related to the cap table–a founder with a lot of stock needs liquidity or you need to push this person out of the company.

Cap Table 48

Cap Table Institutional Investors Startup Early Stage 48

Up and Running

JULY 2, 2014

This should be clearly spelled out in your Capitalization Table , or “Cap Table” as it’s commonly called. A Cap Table shows who owns the company, what the ownership shares are, and what the owners have invested in exchange for that share. Can they create and advise on a Capitalization Table?

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Hunter Walker

SEPTEMBER 29, 2022

As an early stage fund, often buying 10–15% of a company during its seed financing, this meant we were often being asked if we wanted to sell portions of our stakes to other approved investors (let alone the random pings from market-makers unaffiliated with the company). You don’t try to reprice the company on your own.

Venture Capital 126

Venture Capital Cap Table LP Equity 126

VC Adventure

MAY 10, 2020

Particularly confusing to many companies was the statement that companies needed to consider whether they had alternative financing options. In particular is the question of what “economic necessity” means for a business, which was the standard set in the original act by Congress.

SBA 79

SBA Affiliate Los Angeles Cap Table 79

Berkonomics

MARCH 8, 2012

When you seek professional investors, whether organized angels or venture capitalists, one of the early questions you are asked is “How have you financed the business so far?” Investors love to see entrepreneurs who have used their own money to ignite their businesses. But often, entrepreneurs turn to others for initial capital.

Cap Table 74

Cap Table Private Placement SEC Accredited Investor 74

VC Adventure

AUGUST 15, 2018

It was a benefit to employees and a slight value transfer from equity holders to option holders (generally speaking in M&A transactions the value of the aggregate option exercise ends up allocated across the rest of the cap table). Similarly I assumed that later stage companies would also show a smaller gap. I was wrong.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

This is going to be BIG.

OCTOBER 22, 2014

You''ll get an entrepreneur who has raised one and only one round of financing in his or her entire life--all from relatively unsophisticated individuals, giving fundraising advice. Others talked as if they were the ones doing the deals--even though they''re just the ones making the cap tables in Excel. You''re smart.

Venture Capital 158

Venture Capital Cap Table Startup Early Stage 158

Hunter Walker

AUGUST 8, 2023

The reality is lots of companies – many of them quite promising – have already undergone, or will be facing, next financings which “clean up” old cap tables. Whatever gets reported is just the tip of the iceberg. As The Information proclaims, “ Unicorn Fire Sales Ahead.”

Portfolio 103

Portfolio Cap Table LP Valuation 103

OnlyOnce

DECEMBER 1, 2021

As startups scale, they are likely to hire a more senior accountant, maybe an AR/AP/Collections staff member, or even a Controller or VP Finance. Another telltale sign that you might need a CFO is more tangible: Are you spending too much of your own time managing fundraising, debt, investors, and cap table questions and issues?

Hiring 117

Hiring Cap Table Finance Equity 117

Both Sides of the Table

SEPTEMBER 16, 2010

“When our capital and participation has helped de-risk a business to the point where it is appropriate to follow on and finance growth, we want to step up to do our pro rata and beyond.&#. And if you’re not busy being crushed (diluted) you might not notice that the people above you in the cap table (e.g. But it is.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

OnlyOnce

JULY 14, 2022

I wrote a little bit about the experience of being a multi-time founder in this post where I talked about the value of things like a hand-picked team, hand-picked cap table, experience that drives efficient execution, and starting with a clean slate. They have an Easier Time Recruiting team members and investors.

Cap Table 62

Cap Table Founder Portfolio Finance 62

VC Adventure

OCTOBER 24, 2018

These can be event driven – for example discussing an M&A opportunity or an upcoming financing. Also include your cap table, any board minutes you’re asking the board to approve as well as option grants and any other board business you’re planning on asking the board to consider in the meeting.

Design 91

Design Cap Table Email Operations 91

David Teten

AUGUST 19, 2019

Since 2017 we’ve managed $3 million in revenue-based financing, which helps cash-strapped technology companies grow. According to John Borchers, Co-founder, Decathlon is the largest revenue-based financing investor in the US. We agree on a Return Cap which is a multiple of the initial investment (typically 3-5x). “We

Revenue 60

Revenue Technical Review Software Review Equity 60

Hunter Walker

SEPTEMBER 17, 2024

As a side note, another thing I wish people (especially women and other underrepresented talent) understood is that while venture is a money-management and investment business, it doesn’t require a deep finance background to do it (at early stages). The best dishes have mix of components in proportions which make sense.

Venture Capital 87

Venture Capital LP Cap Table Portfolio 87

The Next Web

OCTOBER 7, 2013

Cap tables sound intimidating. As stated earlier, investors will dilute ownership upon nearly every round of financing. From the perspective of my outside friends, why are employees that so clearly impact the growth trajectory of a company look like they’re getting screwed?

Engineer 129

Engineer Dilution Option Pool Vesting 129

Business Plan Blog

NOVEMBER 13, 2013

The first milestone in a new startup’s financing is called ‘Seed Capital’ which refers to the initial investment raised by the founders from their friends and family, or commonly referred to as FFF (Friends, Family and Founders), who mostly use their personal assets. *The Convertible Debt Financing. Raising Seed Capital.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Hunter Walker

SEPTEMBER 15, 2023

So when I tell you what I’m seeing in venture financing these days if you disagree with me, it might just be that we’re touching different parts of the elephant. When $20B outcomes occur everyone on the cap table eats well. Gotta own enough of your winners. When it’s $2B, you better have gotten your ownership.

Cap Table 96

Cap Table Valuation Salary Seed Stage 96

Both Sides of the Table

OCTOBER 7, 2014

5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007. Entrepreneurs started demanding that VCs call their first-round financings “seed” rounds even if they were $3 million. It is less about actual money and more about structure of your Cap Table.

Cap Table 399

Cap Table Silicon Valley Term Sheet Finance 399

Both Sides of the Table

AUGUST 2, 2014

Like inside bridge rounds where investors want to protect themselves from the company getting sold prior to the next financing and leaving the bridge funding without adequate returns. What should the right return be in this case? It’s not an easy question even thought there are industry standards.

Cap Table 346

Cap Table Cofounder Stock Acquisition 346

Gust

OCTOBER 8, 2014

Cautionary note: No competent VC is actually fooled when you show up after raising $6M in seed financing and say you’re now raising an A! 5 million was always the classic definition of an A-round between the late nineties (crazy financings aside) and say 2007. It is less about actual money and more about structure of your Cap Table.

Cap Table 136

Cap Table Silicon Valley Term Sheet Non-Compete 136

David Teten

DECEMBER 3, 2019

Some notable metrics are revenue growth rates, free cashflow, leverage ratios, historical financing amounts, returns on marketing spend, customer acquisition costs, lifetime value of customers, customer churn rates, and team social scores. 645 Ventures released a cap table simulator to help level the playing field.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78