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Cap Table and Returns Template

The document outlines the capitalization tables for a startup company, NewCo Inc., as it progresses through different funding rounds. It shows: - The initial cap table with founders owning 100% - A $1M Series A investment diluting founders to 60% and providing 25% to each of two investors - A $5M Series B investment further diluting founders to 36.5% and allocating shares to the Series B investors It also models potential exit scenarios, calculating investor returns, liquidation preferences, and how proceeds would be distributed between common and preferred shareholders. The cap tables and exit scenarios help founders and investors understand ownership changes and returns from future financing events.

Uploaded by

Dean Dorrell
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLS, PDF, TXT or read online on Scribd
272 views

Cap Table and Returns Template

The document outlines the capitalization tables for a startup company, NewCo Inc., as it progresses through different funding rounds. It shows: - The initial cap table with founders owning 100% - A $1M Series A investment diluting founders to 60% and providing 25% to each of two investors - A $5M Series B investment further diluting founders to 36.5% and allocating shares to the Series B investors It also models potential exit scenarios, calculating investor returns, liquidation preferences, and how proceeds would be distributed between common and preferred shareholders. The cap tables and exit scenarios help founders and investors understand ownership changes and returns from future financing events.

Uploaded by

Dean Dorrell
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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NewCo Inc.

Pro Forma Cap Table


Start-up Capitalization

Founders
Options Granted
Options Available
Investor 1
Investor 2
Investor 3
Total
Pre-Money Valuation
Price / Share
Total $ Invested
Post-Money Valuation
Date

Common
1,000,000

1,000,000

Total
1,000,000
0
0
0
0
0
1,000,000

%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

Series A
Investment

$ 1,000,000
$
$
$ 1,000,000
$ 3,000,000
$
3.00
$ 1,000,000
$ 4,000,000
6/30/2009

Series A Funding
Series A
Post-Money
FD
Preferred
Total
%
1,000,000 75.0%
0.0%
0.0%
333,333
333,333 25.0%
0.0%
0.0%
333,333
1,333,333 100.0%

Founders diluted by 25%


Investor desires 25%
ownership.

NewCo Inc.
Pro Forma Cap Table
Start-up Capitalization

Founders
Options Granted
Options Available
Investor 1
Investor 2
Investor 3
Total
Pre-Money Valuation
Price / Share
Total $ Invested
Post-Money Valuation
Date

Common
1,000,000

1,000,000

Total
1,000,000
0
0
0
0
0
1,000,000

%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
250,000
250,000
0
0
0
250,000
1,250,000

New Options

True Pre-Money: $

%
80.0%
0.0%
20.0%
0.0%
0.0%
0.0%
100.0%
2,400,000

Series A
Investment

$
$
$
$

1,000,000
1,000,000

$
$
$
$

3,000,000
2.40
1,000,000
4,000,000
6/30/2009

Series A Funding
Series A
Post-Money
Preferred
Total
1,000,000
250,000
416,667
416,667
416,667
1,666,667

FD
%
60.0%
0.0%
15.0%
25.0%
0.0%
0.0%
100.0%

Including options in the pre-money calculation is


very common in term sheets.

Note the lower price per share despite same premoney valuation due to the new options. This values
the pre-money company prior to options at $2.4

NewCo Inc.
Pro Forma Cap Table
Start-up Capitalization

Founders
Options Granted
Options Available
Investor 1
Investor 2
Investor 3
Total
Pre-Money Valuation
Price / Share
Total $ Invested
Post-Money Valuation
Date

Common
1,000,000

1,000,000

Total
1,000,000
0
0
0
0
0
1,000,000

%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
250,000
250,000
0
0
0
250,000
1,250,000

New Options

%
80.0%
0.0%
20.0%
0.0%
0.0%
0.0%
100.0%

True Pre-Money: $ 2,400,000

Series A
Investment

$ 1,000,000
$
$
$ 1,000,000
$ 3,000,000
$
2.40
$ 1,000,000
$ 4,000,000
6/30/2009

Series A Funding
Series A
Post-Money
Preferred
Total
1,000,000
250,000
416,667
416,667
416,667
1,666,667

%
60.0%
0.0%
15.0%
25.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
161,000
411,000
416,667
0
0
161,000
1,827,667

New Options

%
54.7%
0.0%
22.5%
22.8%
0.0%
0.0%
100.0%

True Pre-Money: $ 9,119,095

Series B
Investment

$
$
$
$

1,000,000
4,000,000
5,000,000

$ 10,000,000
$
5.47
$ 5,000,000
$ 15,000,000
6/30/2010

Series B Funding
Series B Post-Money
Preferred
Total
########
411,000
182,767
599,433
731,067
731,067
913,833
########

FD
%
36.5%
0.0%
15.0%
21.9%
26.7%
0.0%
100.0%

% Preferred
0.0%
0.0%
0.0%
45.1%
54.9%
0.0%
100.0%

Note who controls a majority of Preferred. This is important for


voting rights.

NewCo Inc.
Pro Forma Cap Table
Start-up Capitalization

Founders
Options Granted
Options Available
Investor 1
Investor 2
Investor 3
Total

Common
1,000,000

1,000,000

Total
1,000,000
0
0
0
0
0
1,000,000

%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
250,000
250,000
0
0
0
250,000
1,250,000

New Options

%
80.0%
0.0%
20.0%
0.0%
0.0%
0.0%
100.0%

True Pre-Money: $ 2,400,000

Pre-Money Valuation
Price / Share
Total $ Invested
Post-Money Valuation
Date

Series A
Investment

$ 1,000,000
$
$
$ 1,000,000

Series A Funding
Series A
Post-Money
Preferred
Total
1,000,000
250,000
416,667
416,667
416,667
1,666,667

%
60.0%
0.0%
15.0%
25.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
161,000
411,000
416,667
0
0
161,000
1,827,667

New Options

%
54.7%
0.0%
22.5%
22.8%
0.0%
0.0%
100.0%

True Pre-Money: $ 9,119,095

$ 3,000,000
$
2.40
$ 1,000,000
$ 4,000,000
6/30/2009

Series B
Investment

$
$
$
$

1,000,000
4,000,000
5,000,000

Series B Funding
Series B
Post-Money
Preferred
Total
########
411,000
182,767
599,433
731,067
731,067
913,833 ########

%
36.5%
0.0%
15.0%
21.9%
26.7%
0.0%
100.0%

% Preferred
0.0%
0.0%
0.0%
45.1%
54.9%
0.0%
100.0%

$ 10,000,000
$
5.47
$ 5,000,000
$ 15,000,000
6/30/2010

Exit Waterfall
High Scenario
##########
$
36.48
6/30/2011

Exit Value
Value Per Share (as-converted basis)
Exit Date
Liquidation Preferences
Series B 1x Straight Preferred
Series B Dividend

Date
6/30/2010

Total Series B Preference


Convert to Common?
Series A 1x Straight Preferred
Series A Dividend
Total Series A Preference
Convert to Common?

6/30/2009

Dividend
$
0% $

Per Share
5.47
-

5.47
TRUE

$
0% $

2.40
-

Shares
913,833 $
913,833 $

5,000,000
-

5,000,000

$
$

1,000,000
-

1,000,000

416,667
416,667

2.40

Date
6/30/2010
$

6/30/2009
$

Remaining Common Proceeds

Total Proceeds
Series B
Series A
Common
Options
Total
Multiple of Cost
Series B
Series A
Check if Proceeds are above Preference:
Series B
Series A

Dividend
$
0% $

Per Share
5.47
-

5.47
FALSE

$
0% $

2.40
-

Shares
913,833 $ 5,000,000
913,833 $
$ 5,000,000

416,667
416,667

2.40

$ 5,000,000

$ 1,000,000
$
$ 1,000,000

Lower than preferences of B but higher than A.

B exercises preference .

A converts to common.

TRUE

Total Preferences

Common Proceeds
Series B
Series A
Common
Options
Total

TRUE

Low Scenario
$ 12,000,000
$
4.38
6/30/2011

Value per share if everyone converted to comon.


Note it is greater than preferences of A and B.

$ 5,000,000

##########
Shares % of Proceeds
913,833
33.3%
416,667
15.2%
1,000,000
36.5%
411,000
15.0%
2,741,500
100.0%
Per Share
$
36.48
$
36.48
$
36.48
$
36.48

% of Proceeds
33.3%
15.2%
36.5%
15.0%
100.0%

$
$
$
$

33,333,333
15,198,492
36,476,382
14,991,793
##########

$
$
$
$

33,333,333
15,198,492
36,476,382
14,991,793
##########

$ 7,000,000
Shares % of Proceeds
0.0%
416,667
22.8%
1,000,000
54.7%
411,000
22.5%
1,827,667
100.0%

A/B convert to common and participate in Common


proceeds.

$
$
$
$

5.47
3.83
3.83
3.83

41.7%
13.3%
31.9%
13.1%

$
$
$
$
$

1,595,842
3,830,020
1,574,138
7,000,000

$
$
$
$

5,000,000
1,595,842
3,830,020
1,574,138

B does not participate in Common proceeds.

100.0% $ 12,000,000

6.7x
15.2x

1.0x
1.6x

Important criteria of how well the investment


performed. VCs typically aim for 4-10x returns.

OK
OK

OK
OK

Important check to make sure investor proceeds are


greater than or equal to their preferences.

NewCo Inc.
Pro Forma Cap Table
Start-up Capitalization

Founders
Options Granted
Options Available
Investor 1
Investor 2
Investor 3
Total

Common
1,000,000

1,000,000

Total
1,000,000
0
0
0
0
0
1,000,000

%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
250,000
250,000
0
0
0
250,000
1,250,000

New Options

%
80.0%
0.0%
20.0%
0.0%
0.0%
0.0%
100.0%

True Pre-Money: $ 2,400,000

Pre-Money Valuation
Price / Share
Total $ Invested
Post-Money Valuation
Date

Series A
Investment

$ 1,000,000
$
$
$ 1,000,000

Series A Funding
Series A
Post-Money
Preferred
Total
1,000,000
250,000
416,667
416,667
416,667
1,666,667

%
60.0%
0.0%
15.0%
25.0%
0.0%
0.0%
100.0%

New Option Pool


Pre-Money
Total
1,000,000
0
161,000
411,000
416,667
0
0
161,000
1,827,667

New Options

%
54.7%
0.0%
22.5%
22.8%
0.0%
0.0%
100.0%

True Pre-Money: $ 9,119,095

$ 3,000,000
$
2.40
$ 1,000,000
$ 4,000,000
6/30/2009

Exit Waterfall
High Scenario
##########
$
36.48
6/30/2011

Exit Value
Value Per Share (as-converted basis)
Exit Date
Liquidation Preferences
Series B Full Participation
Series B Dividend

Date
6/30/2010

Total Series B Preference


Convert to Common?
Series A 1x Straight Preferred
Series A Dividend
Total Series A Preference
Convert to Common?

6/30/2009

Dividend
$
0% $

Per Share
5.47
-

5.47
FALSE

$
0% $

2.40
-

Shares
913,833 $
913,833 $

5,000,000
-

5,000,000

$
$

1,000,000
-

1,000,000

416,667
416,667

2.40

Date
6/30/2010
$ 5,000,000

6/30/2009
$

$ 5,000,000
$ 95,000,000

Common Proceeds
Series B
Series A
Common
Options
Total

Series B
Effective Pre-Money Valuation
Effective Post-Money Valuation
Multiple of Cost
Series B
Series A

Check if Proceeds are above Preference:


Series B
Series A

$
0% $

Per Share
5.47
-

5.47
FALSE

$
0% $

2.40
-

Shares
913,833 $ 5,000,000
913,833 $
$ 5,000,000

416,667
416,667

2.40

$ 5,000,000

$ 1,000,000
$
$ 1,000,000

TRUE

Remaining Common Proceeds

Total

Dividend

TRUE

Total Preferences

Total Proceeds
Series B
Series A
Common
Options

Low Scenario
$ 12,000,000
$
4.38
6/30/2011

$
$
$
$

Shares % of Proceeds
913,833
33.3%
416,667
15.2%
1,000,000
36.5%
411,000
15.0%
2,741,500
100.0%

$
$
$
$
$

31,666,667
14,438,568
34,652,562
14,242,203
95,000,000

Per Share % of Proceeds


40.12
36.7%
34.65
14.4%
34.65
34.7%
34.65
14.2%

$
$
$
$

36,666,667
14,438,568
34,652,562
14,242,203

100.0%

##########

$ 5,000,000
$ 7,000,000

Investor receives preference and participates in


Common, effectively "double dipping".

Percentage of proceeds is an important way


investors look at ownership.
In a big exit, participation doesnt matter as much.
The smaller the exit, the more effect participation
has.

$
$
$
$

Shares % of Proceeds
913,833
33.3%
416,667
15.2%
1,000,000
36.5%
411,000
15.0%
2,741,500
100.0%

$
$
$
$
$

2,333,333
1,063,894
2,553,347
1,049,425
7,000,000

Per Share % of Proceeds


8.02
61.1%
2.55
8.9%
2.55
21.3%
2.55
8.7%

$
$
$
$

7,333,333
1,063,894
2,553,347
1,049,425

100.0% $ 12,000,000

$ 8,636,364
$ 13,636,364

7.3x
14.4x

1.5x
1.1x

OK
OK

OK
OK

Series B
Investment

$
$
$
$

1,000,000
4,000,000
5,000,000

$ 10,000,000
$
5.47
$ 5,000,000
$ 15,000,000
6/30/2010

Series B Funding
Series B
Post-Money
Preferred
Total
########
411,000
182,767
599,433
731,067
731,067
913,833 ########

%
36.5%
0.0%
15.0%
21.9%
26.7%
0.0%
100.0%

% Preferred
0.0%
0.0%
0.0%
45.1%
54.9%
0.0%
100.0%

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