This is going to be BIG.

AUGUST 21, 2023

At 43, I’m pretty darn proud of that and you might think that’s pretty fast—but if I equate that into startup terms, no one would fund me at that pace. But back to the cap table. Here’s why VC’s don’t actually care about your prior cap table in most circumstances. That’s why down rounds exist.

Cap Table 78

Cap Table Term Sheet Database Option Pool 78

Feld Thoughts

FEBRUARY 9, 2016

Mark Suster wrote a great post yesterday titled The Resetting of the Startup Industry. “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. Then use the down round to clean up your preference overhang.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

Hunter Walker

AUGUST 8, 2023

Our estimates were not out of line with new data from top firms like USV who, according to reports, “ marked down the value of seven of its funds by nearly 26%.” Restructures, Down Rounds, and Pay to Plays. And fascinating new advances (and needs) in AI, climate, biology, etc are driving tech-IP driven startups.

Portfolio 98

Portfolio Cap Table LP Valuation 98

Berkonomics

AUGUST 3, 2023

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

ithacaVC

FEBRUARY 1, 2018

It is highly typical for a startup to have small investors on its cap table. The treatment of the friends, family and angels (FFA) as the startup matures and raises larger rounds of financing over time is interesting. Startups often get stuck, restart, pivot/change/move, etc., So not very good odds.

Preemptive Right 45

Preemptive Right Cap Table Valuation Dilution 45

Both Sides of the Table

FEBRUARY 8, 2016

Much has changed in the past four months of the technology startup world and how outsiders value the business. Don’t assume that you can “just do a down round” if necessary. Down rounds are corrosive. The days of easy money may be slowing down. Insiders hate them and fight them.

Burn Rate 150

Burn Rate Cap Table Startup Balance Sheet 150

Berkonomics

JUNE 8, 2017

Some businesses require very little capital and the founder can self-finance the enterprise and retain 100% of its ownership and control from ignition through liquidity event (startup through sale). And even with the significant cost of credit card debt, many entrepreneurs aggressively use existing cards to finance a startup.

Private Equity 106

Private Equity Valuation Cap Table Accredited Investor 106