I’m currently working on the cap table for my early-stage startup and want to make sure we get it right from the start. What are some common mistakes or pitfalls to avoid when structuring and maintaining a cap table? Any tools or best practices that have worked well for others?
Common mistakes to avoid when managing a cap table
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Re: Common mistakes to avoid when managing a cap table
#2- "Ask HN: Why don’t startups share their cap table and/or shares outstanding?" https://news.ycombinator.com/item?id=29141668#29141796
Capitalization table: https://en.wikipedia.org/wiki/Capitalization_table
Re: Common mistakes to avoid when managing a cap table
#3Unfortunately, there isn't an exact science to dilution/valuation in most cases, especially in the very early stages. Ultimately you need to sell as much/as little of the company as is required in order to secure the resources you need to be successful. Owning 100% of something that isn't particularly is always going to be worse than owning 1% of a billion dollar company.
That said, there are generally some norms around percentages for co-founders, and employee option grants can be benchmarked against comp data that you can find in Carta or Pave. And managing your cap table on Carta will help to make things easier in the future for investors/employees/the company to manage the cap table as it grows and changes.
Happy to chat more if that would be helpful!
Re: Common mistakes to avoid when managing a cap table
#4[dead]
Re: Common mistakes to avoid when managing a cap table
#5Cao table is just (not talking blockchain) a list of what you did so you know who owns what. Your ownership is a pie and it goes between you/founders, staff (esop), advisors, levels of investors till it changes up to IPO.
You f your cap table doing deals- mostly with investors. They get to eat the pie if you are not looking (pref shares with economic rights) and by deciding who eats the pie (control rights).
I made a detailed free cap table (I made more than one... old one might be easier to learn from) so you do 'better than your lawyer' in seed/s-a.
You don't want an Excel sheet if you scale to 100 staff (software), but you need to learn cap tables (and esop) so when stuff is in software you know.
You should and can use a lawyer wherever you do a transaction (they can use mine up to a point). Put the liability on them for getting things correct.
I would keynotes on every deal done. I would note them so you know of any terms in case you want to do analysis. Can't remember what is in what sheet, but some of my sheets let you scenario plan.
I'm happy to answer any qu to support ecosystem.
My latest free cap table: https://www.alexanderjarvis.com/resources/tools/cap-table-to...