Sooner or later startup founders face the investor question “How’s Your Cap Table Look?†The goal of this guide is to help you prepare for this question.
This highly visual guide helps you understand the key moving parts of a startup cap table, review typical cap table inputs, and demystify terminology and jargon associated with cap table discussions. Along the way, this guide provides easy-to-follow examples for the most common calculations related to cap table building.
Expanding on these key skills every startup founder should know, this Founder’s Pocket Guide helps you learn how to:
• Build your basic cap table step by step, including founder’s shares, option pools, angel investor rounds, and VC rounds.
• Decipher cap table specific lingo, such as fully-diluted shares outstanding, preferred shares vs. common shares, Series A, Series B, and so on.
• Establish a stock option pool in your cap table and understand the option pool effect on founder dilution.
• Understand the simple math behind cap table formulas and calculations, including calculating fully diluted shares outstanding, investor equity ownership percentages, and share price.