Both Sides of the Table

SEPTEMBER 16, 2010

As I’ve highlighted I believe we’re in a unique period similar to 2005-08 where the biggest tech firms of Silicon Valley (and some media companies) are scooping up small software companies as “talent acquisitions&# versus accretive revenue / profit generators. This is actually the norm. But it is. So know that going in.

Cap Table 283

Cap Table Angel Investor Liquidation Preference Deal Flow 283

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. Soft Acquisition Market. Whatever gets reported is just the tip of the iceberg. And that’s what’s happening here.

Portfolio 98

Portfolio Cap Table LP Valuation 98

Hunter Walker

MAY 13, 2023

Especially in the early days of mobile/iOS engineering, if you hired strong technical talent into your early stage company, you basically created an acquisition outcome floor. Those who do, often believe they can hire from the open market without the hassle of an acquisition. of the time my answer is no f **g way].

Early Stage 117

Early Stage Cap Table Acquisition Sales 117

David Teten

JANUARY 19, 2021

The value ascribed by subsequent investors (in a secondary); buyers (acquisition); or the public markets (IPO). Yes, typically preferred equity. 15-20% sold per round. On average, founders own just 43% of equity by Series B , declining thereafter. Volatile, uncapped. Andressen Horowitz,ff Venture Capital,HOF Capital, Sequoia .

Cofounder 78

Cofounder Technical Review Equity Dividend 78

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. Have they worked with companies who have a global footprint?

Technical Review 118

Technical Review Angel Investor Due Diligence Dilution 118

Both Sides of the Table

AUGUST 2, 2014

What about when an acquisition takes place? The acquiring company wants 100% of the proceeds to go to founders whatever the cap table says because buyers care way more about incentivizing and locking in founders than they do about VC returns or legal provisions to protect VCs. What should the right return be in this case?

Cap Table 346

Cap Table Cofounder Stock Acquisition 346

Hunter Walker

JULY 18, 2021

All in all it worked out fine, driven primary by some fortunate acquisitions to companies like Microsoft, Pinterest and Facebook, the latter two in pre-IPO equity which grew substantially prior to their public listings. I never really tracked IRR or net returns, but I did pay close attention to ‘lessons learned.’ Ok, now that half-mistake….

Cap Table 140

Cap Table IRR Angel Investor IPO 140

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

Steve Blank

APRIL 8, 2010

They collected information that justified their assumptions about the problem, opportunity, market size, their solution and competitors and the their team, They rolled up a 5-year sales forecast with assumptions about their revenue model, pricing, sales, marketing, customer acquisition cost, etc. It was an exquisitely crafted plan.

Business Model 328

Business Model Business Plan Customer Cap Table 328

Hunter Walker

NOVEMBER 13, 2018

Early Stage Hybrid Buyout a la Wag, Brandless, DoorDash : Softbank becomes the largest investor on the cap table, sometimes clears out the Board, and, if reporting is correct, doesn’t broadly offer secondary to earlier investors. Through internal efforts, through acquisition, through investment. Cool, cool.

Cap Table 95

Cap Table IRR IPO Early Stage 95

Feld Thoughts

JULY 5, 2015

If you are a Google watcher, aspire to have you company acquired by Google some day, or just want to understand Google’s approach to acquisitions (which Geis calls “semi-organic growth”) this is a must read book that is well worth the money. It’s comprehensive and well done.

Acquisition 70

Acquisition Cap Table Framework Retention 70

David Teten

AUGUST 19, 2019

Pied Piper Inc needs funding to accelerate customer acquisition for its SaaS solution. The funding agreement outlines the details of how the loan will be repaid, and sets a “cap”, or a point at which the loan has been repaid. Limited amount of existing debt and a clean cap table”. See Indie VC’s Version 3.0. “On

Revenue 60

Revenue Technical Review Software Review Equity 60

This is going to be BIG.

JULY 2, 2015

Yet, as cash friendly as Slack could be--where it could easily have Kickstarter or Craigslist-like cashflow to cap table like ratios, it is still raising hundreds of millions of dollars. You would have also passed on Fitbit, Nest, Tesla, SpaceX, Blue Apron, Makerbot and a whole host of other things. At least you would have done Slack.

Cap Table 60

Cap Table Viral .Net Acquisition 60

keen.io

FEBRUARY 5, 2013

This time, I was looking more closely at Keen’s cap table and various financial events, like raising Series A, becoming profitable, and company acquisition. We asked the founders to talk us through the financials, help us complete the detailed cap table, and discuss the offers together.

Salary 50

Salary Equity Startup San Francisco 50

Hunter Walker

NOVEMBER 20, 2013

Let the Syndicate handle filtering for membership – it would almost feel more like an investment club – but they would see themselves as value add angels, without the company needing to add them all individually to the cap table or hold 20 separate pitch meetings. 3) The Alternate Liquidity Syndicate.

Syndicate 98

Syndicate Syndication South America Seed Stage 98

Scott Edward Walker

AUGUST 6, 2012

Cheers, Scott Top 5 Tweets Quora: Fellow seed investors, do you ask for founder reps on IP and cap table on your deals? My answer: [link] LOL: “Unable to find a legal job after graduation, he delivered pizzas before starting work as a contract lawyer.”

Cap Table 49

Cap Table IP RSS Acquisition 49

Business Plan Blog

NOVEMBER 13, 2013

The return only happens when there is an exit via acquisition or an IPO. It gives in depth examples & templates explaining documents like Term Sheet, Cap Table, Convertible Securities plus the importance of 83(b) filing. Raising Angel Capital. Links to Download Arushi’s eBook.

Finance 93

Finance Accredited Investor Angel Investor Seed Capital 93

Hunter Walker

JANUARY 20, 2015

Despite being the smallest line on a founder’s cap table, we were often one of the first calls they made when confronted with a problem to solve or opportunity to consider. ” or “A buddy told me Competitor A is talking with Google about an acquisition. Seems like he might be interested in working for you guys.”

Cap Table 48

Cap Table Warrant Syndicate Syndication 48

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

Hunter Walker

SEPTEMBER 29, 2022

So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever). You don’t bring investors on to the cap table via a secondary transaction that are going to be problematic. Pigs get fat but hogs get slaughtered.

Venture Capital 122

Venture Capital Cap Table LP Equity 122

The Next Web

OCTOBER 7, 2013

Cap tables sound intimidating. Are they especially acquisitive? 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? A reason might be that negotiation techniques are not a part of their training. N: exit size.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Hunter Walker

DECEMBER 24, 2018

I strongly believe the detailed story of the company’s success is the founders’ one to tell if they choose to do so, but at the risk of excessive inside baseball, I’ll share my perspectives from the cap table. BC sits in Homebrew I, a 20 company fund of $35m with initial investments made 2013 – 2015.

Cap Table 96

Cap Table Seed Stage Acquisition Vertical 96

www.payne.org

SEPTEMBER 22, 2011

Common stockholders should care about the preference, because that preference is "ahead" of the commons in any acquisition outcome. Some vesting plans may accelerate vesting for certain events, such as an acquisition. The other factor is the "cap table" (capitalization table, or summary of who owns what stock).

Equity 56

Equity Employee Vesting Preferred Stock 56

Version One Ventures

DECEMBER 3, 2019

Outcome: Just sold to PayPal for $4B (PayPal’s largest acquisition to date). Carta went on to become the standard for cap table management and is a unicorn many times over. . We loved the founders, but didn’t have much conviction around the scalability of a browser plug-in and the fact that this was a bridge round.

Portfolio 202

Portfolio Cap Table Early Stage Valuation 202

VC Cafe

FEBRUARY 9, 2011

Know your industry’s standards and keep a controlled cap table. My second client involved a more mature during an acquisition transaction. In this case, we were forced to deal with major setbacks in the acquisition process and jeopardized the company’s relationship with the buyer.

Technical Review 90

Technical Review Cap Table Due Diligence Non-Compete 90

Rob Go

FEBRUARY 24, 2014

Like everyone else, I was very impressed by Facebook’s $16B+ acquisition of WhatApp. Also, because of the first point, getting a really big exit is probably dependent on acquisition, and once you get beyond a certain scale, your list of acquirers is pretty darn slim. This post is a bit of inside baseball, but bear with me.

Cap Table 78

Cap Table Valuation Finance Institutional Investors 78

venturehacks.com

OCTOBER 21, 2010

Update : Check out our $9 cap table which calculates the effect of the option pool shuffle on your effective valuation. All our products Pitching Hacks , Cap Table , and Co-founder Interview. Likewise, the new options lower your company’s share price from $1.33/share share to $1.00/share: Learn more.

Option Pool 68

Option Pool Pre-Money Valuation Dilution Warrant 68

Hunter Walker

AUGUST 23, 2023

I can vouch for his genuine optimism Hunter Walk: You got to work with a number of different VCs on your cap table for Anchor. There were few podcast acquisitions after that eclipsed the value of ours, and those that did were only incrementally more valuable. Who was the best one and why was it Homebrew?

Founder 87

Founder Angel Investor Cap Table Distribution 87

www.paulgraham.com

APRIL 28, 2010

Its thesame with acquisitions. So the totalnumber of new shares issued is 750, and the cap table becomes: shareholder shares percent -VCs 650 33.3angel 200 10.3uncle 50 2.6each founder 250 12.8employee 36* 1.8 No one wants to buy you till someone elsewants to buy you, and then everyone wants to buy you.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Haystack

JANUARY 13, 2020

Windfall events are almost required to extend one’s lifespan in the Bay Area these days, and this acquisition certainly qualified as one for those involved. I saw a tweet lamenting the acquisition price of Plaid as “crazy” because it was 35x revenue. 3/ Strategic fit trumps financials.

Acquisition 74

Acquisition Cap Table API Venture Capital 74

This is going to be BIG.

SEPTEMBER 12, 2022

WeWork needed billions in a cap table crushing lifeline and Knotel went bankrupt as well. Amid of the controversy, dunking, and tearing of robes around this company, the simple explanation behind its failure is that COVID-19 killed pretty much everyone in the “people gathering to work in physical spaces'“ space.

Cofounder 121

Cofounder Venture Capital Community PR 121

abovethecrowd.com

JUNE 2, 2021

Could we offer a “dial” to issuers and let them (and perhaps their ad agencies) decide? * * For GS.com , EXCLUSIVE access to GS hot deal might be a critical competitive tool to keep customer acquisition costs low and encourage larger clients to more to our site from a competitor’s. Party B: The investment banks.

IPO 82

IPO Customer Matching Silicon Valley 82