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. Jonathan Libov has spent a couple years at USV in our two year analyst program and is about to move on to his next thing. MORE

This was a man who, despite agreeing to take the meeting, established within the first few minutes of their conversation that he wasn’t someone who was likely to end up on her cap table and even more importantly, probably someone she didn’t want there. MORE

Solid post for young founders=> Cap Tables, Share Structures, Valuations, Oh My! I’m using Twitter as a form of micro-blogging to share interesting articles, blog posts and video clips relating to startups, entrepreneurship and legal issues. Below are my four most popular tweets for the past month. Cheers, Scott. Top 4 Tweets. A Case Study of Early-Stage Funding [link]. Determination is the most important thing.” MORE

Your historical trading information including financials and a “customer file” which shows the history of your transactions so that investors can run “cohort” analyses Customer reference, personal references, key team members, compensation, cap table, stock option plan, etc. MORE

I am a huge fan of simple cap tables. A cap table is a written record (in Excel, for example) of who owns stock in your company. One rule of simple cap tables is to issue “normal” stock to founders (common stock only) and investors (typically preferred stock, but sometimes common stock to early friends and family). It lists every owner out by amount owned, type of stock (common or preferred), and date purchased. MORE

Viable business structure and cap table. Large and growing market. Real domain expertise. Provable product need. Scalable business model. Competitive advantage. Platform/partnership/bizd ev/API strategy. External validation (ideally traction and/or passionate customers). Reasonable valuation. Proven team (tech/product/design/mark eting/sales/domain/etc.). But most important of all , it must have an entrepreneur on whom I’m willing to bet. MORE

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. AskVenture.com: Sample Cap Table. StartupNetwork: Capitalization Table. ModelSheet: Capitalization Table. MORE

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. These guys put together something very cool and it follows the “Give before you get” rule. They call it STARTUP ECONOMICS. Here it is… https://www.smartasset.com/infographic/startup. MORE

Who knew the cap table market could be so big? If you and/or your company uses eShares (now Carta) to track your ownership table, you likely understand this. ” and now we can add “cap table software?” Our portfolio company eShares changed their name to Carta this week. MORE

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. For an industry that doesn’t do it for the money, we sure talk about money an awful lot in the world of startups. MORE

“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. Deal with reality as a founder as well as an investor group and avoid this complexity – just clean up your cap table instead. MORE

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. Here was a level playing field where anyone could launch a business without permission from anyone. MORE

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. So I was excited to see that First Round Capital featured a blog post by Andy Rachleff on this topic yesterday. Andy included this slide deck in his post and I will reblog it here. Wealthfront Equity Plan from Wealthfront. MORE

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. Of course many entrepreneurs naturally focus on the main tab of their cap table spreadsheet that shows ownership by founder, investor, etc and for them this is the starting point of negotiating a round. This is especially true when the round price is significantly higher than the convert cap. MORE

Secondly, even if you are ok with either arrangement you have proposed, it is a major red flag to investors to have much of the cap table locked up with dead-beat co-founders / professors / advisors who are not working day-to-day on the company. You will have tremendous difficulty raising money with this kind of cap table, and investors will make you restructure your cap table. Dear elizy : I started a company in school with two co-founders. MORE

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. Of course many entrepreneurs naturally focus on the main tab of their cap table spreadsheet that shows ownership by founder, investor, etc and for them this is the starting point of negotiating a round. This is especially true when the round price is significantly higher than the convert cap. MORE

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. My partner Seth covered this nicely in his post That convert you raised last year is a part of your cap table. That convert you raised last year is a part of your cap table. MORE

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 managementGust announces acquisitions of Sharewave and Preferred Return; creates the most robust and affordable equity management solution for early-stage startups. MORE

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? MORE

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. A term sheet will almost always contain a summary cap table, which we describe in this chapter. MORE

101 funding Soomla Yaniv Nizan cap table Eyeview VC Funding is never easy. Even when you hear stories about entrepreneurs who walk out of a VC with a personal check from the managing director, it is usually after 6 months of pitching and hearing ''no''. MORE

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. QUESTION #1: This leads to our cap table clean up question #1, namely is that the right allocation? Too much convertible debt on your cap table is a pain in the butt to deal with as it will drive down your valuation. MORE

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. Venture capitalists are very much tabla rasa investors. One frequently hears about deals with "no hair," "plain vanilla terms," and good hygiene. MORE

Who will hold the accountable to building something they’re proud of but remember we sit on the cap table, not the org chart. I live for that moment of flicker in an entrepreneur’s eye during a pitch discussion. MORE

As one of the lead engineers at ff Venture Capital , I spend most of my day building custom software solutions that enhance our firm’s process–tools that range from portfolio investment management to co-investor and cap table tracking and more. MORE

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. MORE

It is less about actual money and more about structure of your Cap Table. Invested Interests cap table venture capital Marc Andreessen kicked off another great debate on Twitter last night, one that I’ve been talking about incessantly in private circles for the past 2-3 years – what actually IS the definition of a seed vs. A-round. 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! MORE

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. They are simple, but critical to understanding how the cap table works and how valuable the cap table can be to your understanding of your stock holdings. MORE

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. And now as a VC, I keep the Cap Table for a few of the company’s for which I am a board member. should have its own tab on the Cap Table. MORE

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 company has been around for a few years and has financed itself along with way with all sorts of various notes at various caps (or no cap) and finally the whole f **g mess is resolved and nobody owns anywhere near as much as they had thought. MORE

You lose influence as larger investors come into the cap table and start throwing their weight around. I tweeted out this article from Techcrunch in the middle of last week: “we believe 2012-16 was a bubble in early-stage funding” [link]. MORE

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. Cap tables are almost always prepared and kept in spreadsheets, usually excel, but also increasingly google sheets. MORE

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. Even though I finished reading Emily Chang’s Brotopia last month, it’s lingered. MORE

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. In addition to modeling a cap table and ownership of the company, Jeff’s software helps answer questions like “if I sell for $100M, how much money does everyone receive.&#. MORE

How do you decide who you should have in your cap table? The post The “reverse” pitch: Who should you have on your cap table? When we think about pitches, most of the focus is on entrepreneurs pitching investors for capital. But VC can be competitive, particularly for interesting deals, and in many cases, the pitch meeting is a two-way street. Some of the best later-stage investors walk founders through an institutionalized “reverse” pitch. MORE

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. One of the co-founders replied via email “we don’t need that, our cap table is all in a single spreadsheet.” A perfect cap table is very rare, unless you are using a tool like eShares. MORE

I redacted our cap table and pictures of our VCs, but otherwise, feel free to use it with your own management team, or even your whole company. MORE

Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table. MORE

Furthermore, cap table are not filed anywhere. Q: We are a Delaware C Corp registered as a Foreign Entity in Colorado our home state and we need to figure out the answers to the following questions with regards to stock certificates. MORE

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. Time to update the cap table. When you read the cap table, think of it as a series of events that add new columns to the right. MORE

Startups look for investors to gain the resources they need to move forward (not to mention, getting a Silicon Valley VC on the cap table is likely to give entrepreneurs a huge ego boost) but are startups missing out by not bootstrapping MORE

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. Describing that capital using the phrase “friends, family and fools,” or “FFF,” has become as common as to be trite. MORE

Cap table. Make sure you have an updated cap table ready to go. Oftentimes startups add employees or mentors and forget to update the cap table to reflect those changes. (Powered by LaunchBit ). Raising money is a dirty job, but someone has to do it right? MORE