A cap table is something that every startup needs, but something no one really knows how to do. Furthermore there is an implied expectation that founders have one and know how to do them. Like an investor says to a founder “Send me your cap table over this evening will you?”, with the founder saying “Sure!” only to go back to the office and say to their cofounder, “what the hell is a cap table?”

There is actually a pretty hilarious episode of the TV series ‘Silicon Valley’ entitled “The Cap Table” that goes exactly as above. Sensing the ignorance of the startup, Peter Gregory (the VC), goes into shock, exclaiming to his Associate, Monica, “What did I buy?” He then goes on demanding a cap table and business plan from Richard (the protagonist of the series).

Richard doesn’t know what it is and goes to Wikipedia to find out:

cap table

What is a cap table?

It is an excel spreadsheet that sets out in a ledger who owns the startup at different periods of time. It is a list of the shareholders and how much each person owns. It tells you how much money you will make if you exit, which is what I am sure you want to know!

Also read: ‘Why’ you are making a financial model for your fundraise is wrong

Why do you need one?

Think of it this way, when you start out as a founder you own 100% of the company, right? Well you raise a Seed round and now investors have a chunk. How do you know who owns what? The cap table tells you.

Furthermore, by having one properly set out you can truly understand what you own in different scenarios and after all sorts of complex things happen such as effects of liquidation preferences, discounts on convertible debt, the option pool shuffle and more importantly, not confuse ‘basic’ stuff like your ownership being based on post-money valuations and not pre-money.

Introducing my template!

To help founders set up and maintain their cap table I took the liberty of making one for you.

You can download my template here (Click to download it!):

Template Cap Table – Alexander Jarvis

What my template cap table does

The cap table enables you to understand the ownership of your company and how it evolves across multiple financing rounds, as well as play with all the assumptions to support how you structure your next financing round.

The template accounts for most for what you will typically see with investors. It covers you for:

  • Initial founder table
  • Angel investment (Both as convertible debt which converts at Seed stage and straight priced round)
  • Seed investment (Assuming 1x strategy preferred liquidation preference)
  • Series A, B and C (Again structured as the Seed investment)

In addition to the cap table, I have integrated a waterfall returns analysis so you can calculate exactly how much people will earn and at different exit valuation scenarios. I have not seen someone do this before, so I think it is pretty cool.

What my template cap table does not do

As you are no doubt aware, things can get pretty complicated and therefore my model does not account for every scenario. Assuming you are dealing with reputable investors, you won’t ever really have to change this (Such as account for multiple liquidation preferences and participating preferred shares).

I do not assume that you will:

  • Get funded with warrants
  • Assume there is a vesting schedule on shares (Though there is a switch to remove unissued shares from the ESOP pool)
  • Have debt and interest that converts to shares
  • Have multiple liquidation preferences
  • Participating preferred shares
  • Different terms for investors at each stage of funding

I am aware that there are additional things to add into the model, such as calculating effective valuations (Adjusted for ESOP issuance etc), which are just an FYI. Maybe I will upgrade the model in future. 😉

Important Disclaimer!

Your cap table is important. I did this myself and it has not been audited by anyone. You ultimately will need a lawyer to ratify it. I do not take any responsibility whatsoever with what you do with it.

Also, there is nothing new under the sun. I have reviewed all the publicly available cap tables (including one by S3 Ventures that was decent) and my model feeds on existing logic.

Also read: ‘Why’ you are making a financial model for your fundraise is wrong

User guide

I have made a rough guide to using the cap table template, which has been posted to SlideShare and is viewable below on this blog. You can download it if it is easier.

I have automated the whole model so there are only a few places you need to plug in your numbers. You need to understand the formulas too though, to comprehend what is actually happening and in case you need to account for variations of structures!

Have a play and let me know if you have any questions or feedback! There may well be errors, so help everyone out and share if you find something!

You can download the template here:

Template Cap Table – Alexander Jarvis


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Ultimate startup cap table and return analysis template was last modified: June 11th, 2016 by jarvisa
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  • Alex – you may like our online Cap Table over at Reportally.com – we have all of the permutations built in as standard, making it very easy to build & manage cap tables.

  • Hey Stephen, I checked it out. You need to do some bug fixes, I guess you notice drop out in MixPanel. The idea is awesome though.

    • alexanderjarvis

      Thanks. I need to redo the model to include a lot more on convertible notes and make some things more simple to use.
      You haven’t been very clear- i dont know what you mean by block etc
      I presume you mean you negotiated something like a weighted-average ratchet with your angel?
      Firstly that’s pretty crappy terms for this early and secondly if you do a downround at next qualified financing for less than $1m, then your startup is in trouble.
      What you need to do is know the exact terms broad/narrow etc and put the into the seed sheet or angel sheet for conversion price. You can get math in places like this: http://www.startupcompanylawyer.com/2007/08/04/what-is-weighted-average-anti-dilution-protection/. Effectively the price per share they pay comes down and so get issued more shares. This means that you get diluted.

  • sabrina

    looks like we cannot download this anymore – any new way to access

    • Sabrina, I just tested it. It works

  • andy

    hey, is there any way to access the excel I can’t download it for some reason

    • alexanderjarvis

      Hi Andy,
      I have been using a plug-in called ‘social locker’ to test marketing strategies (Helps me stay relevant). You are the second person to comment on there being an issue.
      Will change the code and remove it presently.
      Thanks,
      Alex

  • magafr

    hello Alexander!
    I want tell you that i tried many different cap tables templates and this is 100% the best one!! Very very thanks!!

    I have a question for you.. if you can answer..
    My angel has an antidilution up to 1 milion
    In “Seed Cap Table” how could I block the dilution of angel investor?

    thanks a lot

    • alexanderjarvis

      Sorry i replied to wrong person: Thanks. I need to redo the model to include a lot more on convertible notes and make some things more simple to use.

      You haven’t been very clear- i dont know what you mean by block etc
      I presume you mean you negotiated something like a weighted-average ratchet with your angel?
      Firstly that’s pretty crappy terms for this early and secondly if you do a downround at next qualified financing for less than $1m, then your startup is in trouble.
      What you need to do is know the exact terms broad/narrow etc and put the into the seed sheet or angel sheet for conversion price. You can get math in places like this:http://www.startupcompanylawye…. Effectively the price per share they pay comes down and so get issued more shares. This means that you get diluted.

  • Rob

    Thanks for this – appreciate it.

    • alexanderjarvis

      Thanks!

  • Ishaan Hemnani

    Hi,

    On all the subsequent funding sheets, you’ve missed out Founder #3 on the first (Founders Only) Table. See ‘Seed Cap Table’!B29 for example…

    Ishaan

  • Alfred E Newmann

    Hi

    You should add functionality to allow the user to choose model a convertible note, a SAFE, or a KISS.