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 93

Technical Review Cap Table Venture Capital Finance 93

Up and Running

SEPTEMBER 20, 2021

This is all incorporated into a document called a Cap Table. . A cap table will help you in the strategic management of business decisions. Wondering what a cap table is, its importance, and how you can maintain it to expand your business? What is a cap table? Let’s dive in.

Cap Table 112

Cap Table Pre-Money Valuation Stock Options Option Pool 112

ithacaVC

APRIL 25, 2014

I thought it might be useful to post up a model cap table ( Cap Table Model with Waterfall ). This cap table can be used by a pre-funded startup and then a financing can be layered in. In other words, it shows both pre-money and post-money very clearly. Here are things to note: 1.

Cap Table 79

Cap Table Preferred Stock Pre-Money Valuation Participating Preferred 79

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

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

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

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

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

ithacaVC

DECEMBER 13, 2013

When raising money from investors (angels or VC), it is critical to have a presentable and clean cap table. On a fully diluted pre-money basis, that would mean the option pool represents 14.5% (356,758/2,456,758) of the cap table. Often times a plug is used around 10%. times more equity than Founder X.

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Finance is mission critical, for instance – it just appears on a recurring basis.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

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 77

SBA Affiliate Los Angeles Cap Table 77

Feld Thoughts

FEBRUARY 9, 2016

“If you need to clean up your own cap table first – while very hard to do – it will make outside funding easier” Again, go read the post now – I’ll wait. I watched, participated, and suffered through every type of creative financing as companies were struggling to raise capital in this time frame.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

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

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

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

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

Genuine VC

MAY 20, 2013

Compared to most other areas of finance, venture capital is practiced as more of an art, as opposed to a science. VCs who swear publicly that they’ll never make an investment with less than 20% ownership show up on cap tables in the teens… the 20% pronouncements are just posturing for negotiation.

Venture Capital 244

Venture Capital Cap Table Portfolio Early Stage 244

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

keen.io

FEBRUARY 5, 2013

To begin answering this question, I started on a quest to understand startup financing. This book was written to help founders negotiate financing with investors, but it really helped me understand Keen’s financial situation, and I highly recommend it to anyone joining a startup. First, I read Venture Deals by Brad Feld.

Salary 50

Salary Equity Startup San Francisco 50

Hunter Walker

MARCH 10, 2025

One byproduct of this movement, especially during the blitzscaling era , were new startups in areas such as finance, healthcare, housing, education, using venture capital to acquire customers at accelerated rates. I’ve said before this is one reason why we are very very careful about investing in addiction or mental health startups.

Software 87

Software Cap Table Accredited Investor B2C 87

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

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

www.informationarbitrage.com

FEBRUARY 24, 2010

It is gently laying the foundation for a subsequent financing, helping the CTO set sensible milestones to be achieved that can demonstrate execution skill and release cycle management. It is helping with recruiting by leveraging my networks and experience in a particular domain.

CTO Hire 40

CTO Hire Founder Cap Table Vesting 40

Berkonomics

MARCH 7, 2019

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?” The risk of the “dirty cap table”. Enter the need for larger investments. But often, entrepreneurs turn to others for initial capital.

Cap Table 61

Cap Table SEC Private Placement Accredited Investor 61

Pascal's View

JULY 9, 2017

Many entrepreneurs lose track of what they have been cooking up in the cap table. When it comes time to convert the notes, these entrepreneurs face ‘sticker shock’ about their post-financing ownership. They do not recognize that they may have already contractually sold a meaningful portion of equity in their company.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

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

Both Sides of the Table

SEPTEMBER 15, 2010

In these scenarios angels made great returns precisely because they didn’t need to dip their hands into their pockets a second or third time, their companies didn’t go bankrupt and they didn’t get buried in the cap tables by large VCs who put in “pay to play” provisions in tough times. So where are we now? It’s hard to say.

Angel Investor 284

Angel Investor Cap Table Early Stage Deal Flow 284

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

Austin Startup

AUGUST 20, 2017

Your Cap Table is something that deserves constant care and attention. Messy cap tables can come back to haunt you when you do a financing or sell the company. Startups often hand out shares, options, and warrants for employees and for contractors rendering needed services.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

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 Syndication Syndicate 60

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 127

Cap Table Seed Stage Syndication Syndicate 127

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 154

Venture Capital Cap Table LP Equity 154

Feld Thoughts

AUGUST 26, 2011

When presented in the SCF, these transactions are broken down into three categories: operating, financing and investing activities. The net $50,100 from financing activities all went into equity on the Balance Sheet. Next week we will introduce the Cap Table, and show how it changes when adding a co-founder.

Balance Sheet 131

Balance Sheet Cofounder Cap Table Delaware 131

genylabs.typepad.com

SEPTEMBER 24, 2011

I wont bother going into details on start-up financing terms ( see this post for an overview of typical VC terms) except to say if you dont know and understand: the firms cap table and valuation. Not all start-up stock is created equally. what kind of stock you are getting. what your rights are. Business Models. Clean Energy.

Equity 40

Equity Technical Review San Jose Stock 40

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

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

Feld Thoughts

SEPTEMBER 7, 2010

And, in each case, his firm had decided not to follow on, took themselves out of the cap table, and the three companies were able to raise additional financing (in one case from a different VC firm.). Tags: Seed Financing angel seed VC. I thought this was a pretty clever way to deal with this issue.

Cap Table 134

Cap Table Reputation Finance Programming 134