Cap Table for Startups

A cap table is a spreadsheet that breaks down who owns what in a startup. The cap table is a key item because it reveals how every stakeholder is impacted by every fundraise/ dilution in the Company.

Cap Tables can help startups understand: 

• It helps to draw overall picture of the ownership (pre and post investment)
• It is a critical document that ease founders/ investors to make more informed decisions
• It shows how incentivized the startup’s founders are in the Company.

Download the CapTable working sheet here.

What is CapTable and How we help you

As a startup founder, you'll be involved in various critical activities like fundraising, share transfers, determining the investor’s stake, analyzing the dilutions, etc. - all of these are vital in business as it places the founder’s ownership at stake. 

To overview, Cap Table is required to be prepared that lists down all the stake holding and dilution at summary level. Due to limited knowledge about Cap Table, the founder are always required to consult with an experts to understand the appropriate analysis. 

To ease the pain, Treelife has prepared a sample CapTable format that shares accurate and formula-driven results which saves all the efforts of the founders.

Our CapTable are filled with the following features:

We have prepared a complete package including multiple scenarios like Initial structure, transfers, Esops and two investment rounds. We have also embedded few charts to make it worthwhile and enlighten the summary at once.

It helps in the founder’s in:

• Determining the number of shares held by each founder / investor at every interval
• Provides the ratio to total shares held by each stakeholders;
• Analysis of the shareholding pattern from the early structure till the investment round
• Review the completed scenario through a pie chart

Let’s explore how to unlock the steps to use this format in an easy way to make the tool more useful

Steps to follow to analyze Cap Table for startups:

1. Download the format from the given link above
2. Once downloaded, open the format in an Excel sheet
3. Welcome screen will appear in an Excel sheet
4. Click on “Guidelines” sheet and read it to understand the working pattern of the format
5. Go the “Pre-requisites” and fill the requested information wherever asked:

   • Table 1 - Fill the Company name, Founder details and select applicable scenarios;

   • Table 2 - Feed the founder’s shareholding pattern;
   • Table 3 - Feed the share transfer details, if applicable;
   • Table 4 & 5 - Input the investment details

6. The “main working” sheet will auto-calculate and populate the pattern basis the pre-requisites
7. Refer to the chart analysis sections too for quick understanding

Conclusion:

Cap Table for startups sheet offers the formula-driven product basis the appropriate inputs. It makes trouble-free analysis in simple steps. We have considered very simple and sample assumptions to make it robust.

We simplify your business so that you can spend time on things that matter.

Happy to hear from you.

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Disclaimer:

The content of this article is for information purpose only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

Post Author

Experienced Associate with a demonstrated history of working in the legal services industry. Skilled in Drafting, Research, Documentation, Due Diligence, Corporate Advisory on legal matters, and Microsoft office. Strong professional with a Bachelor’s Degree in Law from K.C. Law College.

- Senior Associate | Legal