A Simple Capitalization Table

Below is the ‘Tip of the Week’ from Ep85: The Cap Table, Part 2 (John Buttrick & Sean Moran)

Instead of the standard tip this week, I’ve decided to put together a very simple version of cap table. As discussed, these things can get quite complex after factoring in various terms and multiple rounds of funding. But it’s best to know the basics and start with a simple example. I’ve put this in a Google Sheet and will make sure to link it up in the post on the website.

If you’d like to test your knowledge, see if you can calculate the price-per-share, with the following inputs…

A startup, called Lost Certs is raising their first round of capital. They have agreed to a pre-money valuation of $3M and have raised a total of $1M. So the post-money valuation is $4M and they are selling 25% of their company. And finally the outstanding founder stock, prior to investment, was 6M shares.

So, based on those inputs, how many shares are being sold and at what price?

Below is a simple cap table w/ formulas and the answer:

https://docs.google.com/spreadsheets/d/1wHUT-SQ6WfqusgnZhZ7yFlQfbuTmNsOo5cu1gVZFY44/edit?usp=sharing

Simple_Capitalization_Table

 

 
   

   

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