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

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

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 82

Technical Review Cap Table Venture Capital Finance 82

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

venturehacks.com

FEBRUARY 24, 2010

Two founders works because unanimity is possible, there are no founder politics, interests can easily align, and founder stakes are high post-financing. All our products Pitching Hacks , Cap Table , and Co-founder Interview. When 4-5 founder companies work, it’s because two founders dominate. Date first. Learn more.

Cofounder 101

Cofounder Founder Technical Cofounder Technical Review 101

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

www.readwriteweb.com

DECEMBER 29, 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 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

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

Altgate

JUNE 25, 2012

Instead, the dead equity languishes on the cap table, weighing down the startup and making it harder to attract and motivate the people who could impact its growth. We took the percentage of equity held by former employees and founders and multiplied it by the startup’s valuation during its most-recent round of financing.

Equity 44

Equity Vesting Cap Table Technical Review 44

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 77

Software Cap Table Accredited Investor B2C 77

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

venturehacks.com

MARCH 21, 2008

Or you can just “burn the boats at the shore&# and give the advisory shares to the investor with the agreement that he will invest a minimum amount in the financing. All our products Pitching Hacks , Cap Table , and Co-founder Interview. .&# You have to be able to convince the other investors—that’s the test.

Advisory Board 44

Advisory Board Cap Table Vesting Equity 44

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 Early Stage Cap Table 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

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