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Broken Cap Tables

A VC : Venture Capital and Technology

A “cap table” is a schedule of all the shares outstanding for a specific company. Here’s an MBA Mondays post I wrote back in 2011 on the subject of cap tables. If you want to know how much of a company you own, a cap table is the best way to figure that out. Employees suffer most.

Founders – Use Your Down Round To Clean Up Your Cap Table

Feld Thoughts

“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. Often, there will be asymmetry between them with your new liquidation preferences having a multiple on them where they participate for a while up to a cap.

Model Cap Tables With VCHub

Ask The VC

A few days ago I answered a question on AsktheVC about modeling cap tables. Jeff has done a nice job building a site that both models a cap table and provides a lot of information to empower entrepreneurs both with educational resources and software tools. Fundraising cap table financingDividends.

Spreadsheets To Model Cap Tables

Ask The VC

Question: One thing that I think would be incredibly helpful would be to have a spreadsheet showing how a cap sheet evolves under a set of financing rounds with the important variables parameterized so we can play with them. However, there are plenty of resources for cap tables on the web. Venture Hacks: How To Make A Cap Table.

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.

How I closed a round with 7 Investors and Survived [Guest post]

VC Cafe

101 funding Soomla Yaniv Nizan cap table Eyeview VC Funding is never easy. Visit my website for full links, other content, and more! ]].

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

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. The problem, of course, is that their convert is already a part of their capitalization – even though it’s not reflected on the cap table.

Great, Simple Cap Table Tool for Startups from SMARTASSET

Scalable Startup

One of the top 3 to 5 worries when launching a startup is is “Who gets how much stock upon start or joining? Founders, Co-Founders, next employees, Investors, Etc. The founders of SmartAsset went through this process and decided to open it up to the world. They call it STARTUP ECONOMICS. TN @tomnora.

Gust Launches Comprehensive Equity Management Platform for Cap Table Management and 409A Valuations

Gust

The post Gust Launches Comprehensive Equity Management Platform for Cap Table Management and 409A Valuations appeared first on The Gust Blog. Gust News Starting Your Company 409A valuations cap table management equity managementThe new platform provides early-stage companies with powerful. Read more >.

That convert you raised last year is a part of your cap table

Seth Levine's VC Adventure

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. The problem, of course, is that their convert is already a part of their capitalization – even though it’s not reflected on the cap table.

Beware the “dirty cap table.”

Berkonomics

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. Growth!

Cap Table Hygiene

Will Price

Conversely, deals that come with cap table challenges (too many investors, too much prior preference, or onerous terms granted to a prior round) are often dead on arrival. Teams of 2-3 founders seem to be the norm and cap table issues, questions about equity (wrt fairness), often arise if the team gets much bigger.

Reblog – Finance Fridays (Introducing the Cap Table and CTO)

ithacaVC

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. When I was General Counsel at a tech company during the 1999 bubble times, I kept the company’s Cap Table.

eShares

A VC : Venture Capital and Technology

But in the world of VC and startups there isn’t much that is more broken than cap table management. eShares fixes that by putting the entire cap table online and allowing your company to issue new shares and options directly from the platform. They will help you “port” your cap table to their system.

Convertible and SAFE Notes

A VC : Venture Capital and Technology

I cannot tell you how many angry pissed off angel investors I have had to talk off the ledge when we are leading a priced round and they see the cap table and they own a LOT less than they thought they did. The first convertible or SAFE note issued in a company should have a cap on the total amount of notes than can be issued.

Five Reasons To Bootstrap Your Startup

Fresh Inc.: The Staff Blog

The End Of The Level Playing Field

A VC : Venture Capital and Technology

I am old enough to remember the gogo days of cable TV when entrepreneurs who wanted to launch a new cable channel would go, hat in hand and cap table in tow, to the big cable companies and beg to get distribution on their networks. When the Internet came along in the early 90s, we saw something completely different.

Clean Up Before Raising Funding

Instigator Blog

Cap table. Make sure you have an updated cap table ready to go. (Powered by LaunchBit ). Get your house in order.

AngelList Syndicate Feedback From An Experienced Entrepreneur

Feld Thoughts

2) Keeping the number of entries on our cap table relatively small. We recently funded Blinkfire Analytics using our FG Angels Syndicate.

The Blurring Of The Public And Private Markets

A VC : Venture Capital and Technology

Privately held companies are increasingly using electronic stock ledgers (like the one our portfolio company eShares offers) which allow them to easily manage a large and rapidly changing cap table, much like the function that brokers and transfer agents provide in the public markets. That was not true a decade ago. Well guess what?

Employee Equity

A VC : Venture Capital and Technology

Andy was a founding partner at Benchmark and knows his way around a startup cap table. Longtime readers will know this is a topic near and dear to my heart. I did a whole MBA Mondays series on this topic and I followed that up with a Skillshare class on the topic. Andy included this slide deck in his post and I will reblog it here.

Is There More Than One Type Of Convertible Debt?

Ask The VC

In this case there were multiple traunches of convertible debt at different valuation caps. My offer was above the highest cap, but I interpreted the way the convertible debt, and pro-rata rights associated with it, worked differently than the entrepreneur did. That convert you raised last year is a part of your cap table.

Do My Early Stage Investors Own Too Much Of The Company?

Ask The VC

Question: Most VCs commented that they can not fund current cap table where the CEO and COO would get 10% equity once fully vested while the current investors have 80%. We talked to our investors and they have agreed to rework the cap table, however, I would like to understand from you what should I change my cap table to?

Venture Deals: Chapter 7: The Capitalization Table

Ask The VC

Even if you know what a cap table is, we’ll give you a simple way to calculate the summary level ownership categories with a calculator (or a simple spreadsheet model). . Now that we’ve worked through all of the specific clauses in the term sheet, let’s go through how a typical capitalization table (cap table) works.

Reserves

A VC : Venture Capital and Technology

But if you want someone you can count on in your cap table, that would be a VC firm, particularly a top tier VC firm. These funds are pools of capital that are capped at some number. That recycling capability is typically capped in the agreement between the VCs and their investors. VCs raise money in discrete funds.

Quick Post on Post-Money Valuations

Rob Go

The second implication is that you will need to really be on top of your own cap table before you really start negotiating.

The Resetting of the Startup Industry

Both Sides of the Table

If you need to clean up your own cap table first – while very hard to do – it will make outside funding easier. Start early.

So What is The Right Level of Burn Rate for a Startup These Days?

Both Sides of the Table

How Complicated is Your Cap Table? Cap Table issues are seldom understood by entrepreneurs. If you raised a $2 million seed round at a $6 million pre then a $5 million A-round at a $20 million pre then a $20 million B-round at a $80 million pre and if your company has stalled you may have a cap table problem.

Staying Independent

A VC : Venture Capital and Technology

Possibly the most interesting running conversation I've been having with entrepreneurs lately is how they can keep their companies independent without having to go public and turn their cap table into a casino. But none of this says to me that new approaches to liquidity for venture investors should not be on the table.

Meaningful Exits for Founders

Bryce Dot VC

We don’t know how many rounds this company has raised, how many other VCs are on the cap table, nor how much the founders own.

The Silliness Of Recapping Seed Rounds

Feld Thoughts

A company raises $1m of seed money from angels in a convertible note with a $6m cap. Assuming equity is raised at or above that cap, the total dilution, before the new money, is 16.6% (equivalent to an equity financing of $1m at a $6m post money valuation. Here’s the scenario. The product gets a lot better. It blew my mind.

7 Ways Due Diligence Helps Before Final Commitment

Startup Professionals Musings

Be prepared to present a detailed cap table, identifying by percentage all owners, investors and debtors. Solution readiness and quality.

The Pre-money vs. Post-money Confusion With Convertible Notes

Feld Thoughts

Or, if you just want the paragraph, it’s: “If this note converts at a price higher than the cap that you have been given you agree that in the conversion of the note into equity you agree to allow your stock to be converted such that you will receive no more than a 1x non-participating liquidation preference plus any agreed interest.”.

What Acquihire Really Means

Feld Thoughts

Dodgeball.com: But really…When a public company with a market cap of $64.1 Often this was built on top of the concept that the acquiree brought to the table, but the core product was rarely used. I hope you had a nice 4th of July yesterday. Amy and I hid out all day in Longmont, playing with the dogs, napping, and reading.

Doing The Right Thing In A Recap

Feld Thoughts

Given the amount raised, the new financing, and the cap, I would have asked the seed investors to waive the terms and instead accept a smaller percentage of the company than they would have otherwise gotten. Yesterday, I got the docs giving the seed investors, which included the FG Angels group, 12% of the post money cap table.

Messing Around At The Fringe

A VC : Venture Capital and Technology

Just as wading in the muck of cap tables and share purchase agreements is the best way for an analyst to learn the mechanics of venture investing, wading in code and API’s and forums is the best way to discover the things that others have not discovered yet. Mess around in the corners of the internet. Don’t waste it.

Advising vs. Investing

Instigator Blog

This has happened a few times when I’ve looked at cap tables. It’s a fun way to be along for the ride. Choose wisely.

Who are stock certificates issued to and when?

Ask The VC

Furthermore, cap table are not filed anywhere. Do the buy and print your own certificates follow the normal process?

Enough with the unicorn bashing

The Equity Kicker

It’s fashionable in certain quarters now to slate some of the billion dollar startups that have been created recently and the investors that helped them get there. Zebras Fix What Unicorns Break is a good example. Companies that aren’t chasing unicorn status find it hard to raise money. What we need here is government intervention.

What is the Definition of a Seed Round or an A Round?

Both Sides of the Table

It is less about actual money and more about structure of your Cap Table. Nobody cares. million. Why the latter? ” I did not.