Both Sides of the Table

JULY 23, 2014

We are in a bubble (with so many private $1bn+ valuations). pre-money valuation you certainly would want to exercise your right to continue investing if you had prorata rights. It’s hard to work out the cap table with your peers when one of them has no real intent in fixing the problem. Where are we today? .”

Technical Review 398

Technical Review Venture Capital Valuation Pre-Money Valuation 398

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. But, as you raise more money at higher valuations, this will normalize. It will suck for a few days but feel a lot better in the long term.

Cap Table 70

Cap Table Down Round Liquidation Preference Founder 70

ithacaVC

DECEMBER 13, 2013

When raising money from investors (angels or VC), it is critical to have a presentable and clean cap table. The share price is calculated by taking the pre-money valuation and dividing it by the number of shares outstanding pre-money. So Share Price (SP) = Pre-Money Valuation (PMV) / Shares Outstanding (SO).

Cap Table 67

Cap Table Pre-Money Valuation Option Pool Liquidation Preference 67

Hearpreneur

AUGUST 20, 2023

And, over-fundraising can trigger a domino effect of complications, from cap-table issues to inflated valuations, which can ruin future fundraising. Thanks to Mike Pio Roda, The Creative VC ! #5- 5- Hire the experts Photo Credit: Rachel Eigen “You can do it all starting small” — B.S.

Entrepreneur 76

Entrepreneur Cap Table Dividend Cofounder 76

David Teten

SEPTEMBER 6, 2018

We also use Carta , which specializes in cap table management and has just launched a fund administration service which we have transitioned to. 9) Accelerate portfolio company value. 10) Time, market, and exit investment.

Technical Review 60

Technical Review Private Equity Management Cap Table 60

David Teten

SEPTEMBER 6, 2018

We also use Carta , which specializes in cap table management and has just launched a fund administration service which we have transitioned to. 9) Accelerate portfolio company value. 10) Time, market, and exit investment.

Technical Review 60

Technical Review Private Equity Management Cap Table 60

VC Adventure

AUGUST 15, 2018

However the board could determine what that fair market value was and, generally speaking, there wasn’t a practical way that these valuations could be challenged. Over night a cottage industry was created to conduct these valuations. So what should this discount be? I was wrong.

Valuation 48

Valuation Common Stock Cap Table Software Review 48

David Teten

DECEMBER 3, 2019

The reports showcase raw data, analytics, visualizations, and benchmarking statistics on the company from dozens of sources, including team, intellectual property, technology, product, financial, banking, marketing, customer, risk, valuation, and investment information.”. If you have one, please contact me. 7) Negotiate .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Hunter Walker

AUGUST 8, 2023

At the time, this is last quarter and the stock market has trended upwards nicely since then (a potential leading indicator of private tech valuations), we all agreed venture portfolios were probably still 25-40% overvalued. Valuations. Whatever gets reported is just the tip of the iceberg.

Portfolio 98

Portfolio Cap Table LP Valuation 98

The Next Web

OCTOBER 7, 2013

Cap tables sound intimidating. As an aside for founders, there is an interesting approach on how to arrive at equity offers outlined by Fred Wilson that may be worth checking out once there is a sense of valuation. Overlooked here is the valuation of the specific startup along its growth trajectory.

Engineer 129

Engineer Dilution Option Pool Vesting 129

Hunter Walker

SEPTEMBER 15, 2023

Semil asserts, Seed-stage valuations have generally been left-unchanged, and I could argue even they’ve gone up since the beginning of 2022. Valuations for the Top Decile of Seed Startups Have Fallen Less YoY While the Second Decile Have Been Hit Harder. When $20B outcomes occur everyone on the cap table eats well.

Cap Table 93

Cap Table Valuation Salary Seed Stage 93

Version One Ventures

DECEMBER 3, 2019

We had a chance to invest in a $500K round at a $12M valuation in 2015. This was not our early-stage sweet spot and the $100M valuation felt rich. Carta went on to become the standard for cap table management and is a unicorn many times over. . And yeah, $12M felt kind of high :-). Eight years and $49.9B

Portfolio 202

Portfolio Cap Table Early Stage Valuation 202

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. 2-5x return cap + path to uncapped equity returns. Yes, via conversion rights at a valuation cap. Typically ~3x+ return cap + path to uncapped equity returns. Flexible VC: Compensation-based. Founder Earnings” (Founder Salaries + Dividends + Retained Earnings).

Cofounder 78

Cofounder Technical Review Equity Dividend 78

OnlyOnce

JULY 30, 2020

Or maybe when you look two years out you realize that your company is at its highwater mark in valuation, so it becomes a timing issue. 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

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. What not to include is directly stating valuation expectations.

Cap Table 211

Cap Table Seed Stage Valuation Dilution 211

ReadWriteStart

SEPTEMBER 2, 2011

As Mark Suster pointed out yesterday on his blog , he's seeing more and more cases where "entrepreneurs are working hard to make sure they have as many VC names and famous angels on their cap table for signaling value." Remember, once you screw up your Cap Table it's really hard to go back.

Cap Table 125

Cap Table Term Sheet Liquidation Preference Technical Review 125

Pascal's View

JULY 9, 2017

This is a fundamental issue that does, indeed, boil down to understanding the post-money valuation of a company. At its core, this issue points to the lack of understanding about the importance of post-money valuation by both entrepreneurs and investors. Many entrepreneurs lose track of what they have been cooking up in the cap table.

Post-Money Valuation 49

Post-Money Valuation Valuation Cap Table Covenant 49

Berkonomics

AUGUST 3, 2023

My experience with early valuations by founders for friends… I’ve arrived at a significant number of companies that were looking for additional growth capital after a “friends and family” round and had to “clean up” the cap table more than a few times over the years.

Private Equity 118

Private Equity Valuation Cap Table Accredited Investor 118

Rob Go

AUGUST 29, 2016

When I first started out as a VC nearly 9 years ago, most early stage company valuations were expressed as pre-money valuations. That is, the valuation of the company prior to the investment of new capital. Today, nearly all early stage term sheets I see are expressed as post-money valuations.

Post-Money Valuation 52

Post-Money Valuation Valuation Cap Table Term Sheet 52

David Teten

MARCH 18, 2021

Valuation: $1M – $3M. “Index the Best” – Only invest in companies that have brand name firms on the cap table and/or as leads. By contrast, Right Side Capital has a very tight thesis : . Check Size: $50K to $200K. Vast majority $100K to $150K. Total Round Size: $50K – $500K. No ideas or prototypes.

Technical Review 78

Technical Review Cofounder Venture Capital Deal Flow 78

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. So founders, please don’t let lack of existing relationships deter you from reaching out to us.

Cap Table 96

Cap Table Seed Stage Acquisition Vertical 96

Hunter Walker

FEBRUARY 15, 2023

Claire got to experience, and played a large part in, Stripe’s proverbial rocketship, blossoming into thousands of employees, generating billions of dollars in revenue and valuation. While at the company — and especially once she departed — Claire became one of the people I always hoped to add to a cap table or startup board.

Cap Table 74

Cap Table Hiring Viral Valuation 74

Hunter Walker

MAY 13, 2023

Cash is at a premium so it’s not going to cap tables (preferred or common walk away from the deals with no dinero). And when they’re giving stock to existing shareholders instead of cash it’s at high 2021 valuations, buried below a preference stack. of the time my answer is no f **g way].

Early Stage 117

Early Stage Cap Table Acquisition Sales 117

Austin Startup

AUGUST 20, 2017

Your Cap Table is something that deserves constant care and attention. Keep the valuations consistent with company progress. Messy cap tables can come back to haunt you when you do a financing or sell the company. You will do yourself a great favor if you can maintain some uniformity in that endeavor.

Technical Review 48

Technical Review Software Review Cap Table Securities and Exchange Commission 48

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

Gust

JANUARY 30, 2014

Viable business structure and cap table. Reasonable valuation. Competitive advantage. Platform/partnership/bizd ev/API strategy. External validation (ideally traction and/or passionate customers). Proven team (tech/product/design/mark eting/sales/domain/etc.). And the attributes I look for in that entrepreneur are: Integrity.

Cap Table 119

Cap Table API Valuation Startup 119

Gust

JUNE 28, 2014

Finally, make sure to keep all your books and records (including your option program, cap table and 409a valuations) accurate and up to date, so that you can respond quickly and professionally when your investors request information to establish valuations for their portfolios. Invested Interests'

Angel Groups 148

Angel Groups Cap Table Term Sheet Valuation 148

www.readwriteweb.com

DECEMBER 29, 2011

As Mark Suster pointed out yesterday on his blog , he's seeing more and more cases where "entrepreneurs are working hard to make sure they have as many VC names and famous angels on their cap table for signaling value." Remember, once you screw up your cap table it's really hard to go back.

Cap Table 47

Cap Table Term Sheet Liquidation Preference Technical Review 47

The Startup Toolkit

AUGUST 29, 2012

You probably don’t need to get the cap table involved in that. You can give an investor an additional advisory kick to improve the terms (for them) without changing the valuation (for other investors). And sometimes it’s super ambiguous. You can also use advisor stakes to close big deals.

Technical Review 38

Technical Review CTO Hire Cap Table Software Review 38

Altgate

AUGUST 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 28

Equity Vesting Cap Table Technical Review 28

View from Seed

JUNE 11, 2019

I believe it’s more important to optimize on the right lead investor vs. the highest valuations at the seed stage (within reason). In order to accomplish the things above, you will probably want to include more than 1–2 investors on your cap table. Remember Goldilocks, not too many, not too few. And stay in touch!

Syndicate 202

Syndicate Syndication Seed Stage Lead Investor 202

View from Seed

AUGUST 6, 2015

With this information an employee or potential employee can understand how much their X-thousands of shares are actually worth in ownership and, at least on paper, in dollars against the total valuation. This is not an argument for circulating the entire cap table or compensation calendar. Everyone deserves his or her privacy.

Equity 120

Equity Employee Cap Table Stock Options 120

View from Seed

AUGUST 6, 2015

With this information an employee or potential employee can understand how much their X-thousands of shares are actually worth in ownership and, at least on paper, in dollars against the total valuation. This is not an argument for circulating the entire cap table or compensation calendar. Everyone deserves his or her privacy.

Equity 120

Equity Employee Cap Table Stock Options 120

techcrunch.com

APRIL 26, 2013

That way, startups only have one entity in the cap table, which simplifies documentation and structure. No wonder the platform is rumored to be raising a round at a $150 million valuation or more. Via SecondMarket, AngelList creates an LLC on the fly into which all the new investors go. The site is also a data goldmine.

SEC 61

SEC Accredited Investor San Diego New York City 61

Scott Edward Walker

SEPTEMBER 16, 2017

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.

Cap Table 45

Cap Table Early Stage Valuation Video 45

Genuine VC

SEPTEMBER 5, 2012

Communications with New Board & Investors Ensure all of your investors have all legal documentation of the round, including an electronic version of the final cap table. Hire a firm to conduct a 409a valuation to set a strike price for your employee stock options, which nees to be at or above “fair market” value.

Founder 156

Founder Cap Table Stock Options PR 156

Austin Startup

DECEMBER 7, 2017

To solve this, VCs and entrepreneurs need a quick and easy way to provide seed funding, without a long, drawn out negotiation, onerous debt covenants, or a crazy valuation that could hurt the investor and/or the entrepreneur. No need to haggle over valuation with us now, just get funded and get to work. This is, obviously, not cool.

Covenant 48

Covenant Cap Table Early Stage SBA 48