Notes

Startup Cap Table Template
Startup cap table is usually a one page document that allows you to present and categorize your business startup capital. The advantage of the startup cap table template is that it allows you to have maximum flexibility and it saves time and money. You can also create it in an application such as Excel or you can even use a simple startup cap table template in an Access database. Regardless of the application you choose, the startup cap table template must include the following fundamental things:

Start Date The most important part of the startup cap table template is the start date. This should be the current date. It is important to keep in mind that the funding process typically takes six months to one year from the time when the company completes the preliminary research to the time when they actually invest the funds. In cases where the company has already conducted preliminary research, it may take a shorter period of time. The start date should be on the same date as the funding prospectus and articles focusing on the funding prospectus. Make sure that the start date on the document matches the anticipated date of the first investment.

Amount of New Investments The startup cap table template should include the number of shares that will be raised in the offering. The document should identify which investors will participate in the offering. In most cases, this is the founder or the largest shareholder. However, if there are going to be additional shareholders, they need to be disclosed here as well. The amount of new investments should be enough to raise the total cap in one day. If there are going to be multiple investors, their names should be indicated on the document.

Number of Holdings For the startup cap table, it is also important to provide the number of shares that will be issued based on the number of shares that the founder or the largest shareholder will have. If the founder is a non-vesting entity, such as an educational startup, the numbers of shares will not be specified. However, if the company is holding its shares through a reverse merger, the owner will still receive a number of shares for each holding.

Types of Shares If a startup cap table is going to be used, the document should indicate what types of ownership structure will be used. In most cases, preferred or common shares are used. The type of ownership structure should be specified in the business plan or other documents for investors to see. It is important to state the percentage of ownership in either preferred or common. The percentages should be clearly stated in order for investors to determine the value of the shares.

Dividends are required when issuing shares and should be stated on the startup cap table. The payment of dividends should occur at the discretion of the board of directors, if the business is a private company. The payment of dividends should be made regularly to allow shareholders to properly assess their investment. Dividend payments should occur at the end of the year to allow new owners to liquidate their shares without having too much of them, if there is an exit strategy.

Price-per-share Cap Table When listing an IPO or another new investment using a cap table, the company should list all of the equity holders of the company. The information should also include the price per share the company will pay to these holders if the company makes a profit during the first year of operations. For new investments, the price-per-share should not be listed since it will not be known if the business will make money or not. For existing companies, however, the price-per-share should be listed on the pre-money valuation.

Number of Shares issued during Initial Public Offering (IPO) If the company grows fast enough and becomes a dominant player in its market, the company could issue too many shares for the number of investors it has. This would create a lot of dilution for early investors. startups -money valuation should include all of the shares issued during the initial public offering. If there are startups than originally issued shares, the price per-share should be based on the number of shares outstanding at the time of the IPO instead of the current diluted share count. Dilution is very important in the stock market and is one of the primary factors that determine the worth of a company.
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